No one seems to understand that the policies of the democrats will ultimately sell the middle class down the river.
22
"If the tax that Ms. Warren has called for had been in place since 1982, the net worth of the 15 richest Americans in 2018 would have been half as much."
Horrors! What would happen to those 15 wealthiest Americans and their poor families? I mean, how could people like Bezos and Gates possibly survive on ONLY HALF of their current net worth?
22
Reshape the economy? Bring it on. It's about time.
21
My favorite part of the article is the Jamie Dimon (CEO of JP Morgan Chase) quote saying that wealthy people would be happy to pay more taxes; they just worry that the government would waste it on special interests. I mean, I guess he'd know, right?
https://dealbook.nytimes.com/2008/03/18/jpmorgans-12-billion-bailout/
20
Reshape the U.S. economy? It's about time.
11
Larry Summers silenced Brooksley Borne. That worked out well, didn't it? Then he became president of Harvard and presided over $1 billion in their endowment investing in the same derivatives Borne warned of. And then he assured Obama that the $787 billion Stimulus would lower unemployment to 8% by mid 2010. Krugman and Stiglitz said $2 trillion would be needed. Guess who was right? Only a fool would listen to Summers
14
I would like to hear more specifics from the opponents of a wealth tax. The arguments mentioned seem unsupported, ideological, or trivial.
Why would a wealth tax, using the Warren plan.stifle innovation? Name an entrepreneur or company that may not have launched because of a wealth tax. Would an entrepreneur fail to launch an enterprise because they thought their future fortune might amount to 100 million instead of 120 million? Seems doubtful to me.
Would the rich alter their investments? Probably. They might invest more in real estate or land since those are out of the taxing authority of the federal government and left to the authority of the states. As it is, the wealthy invest in superstar art, buy stocks, and create investment vehicles to avoid taxation. Would we be worse off?
Would it make the economy less efficient? A basic tenet of consumer economics is that giving additional dollars to poor or middle class consumers creates more economic growth than giving it to the very wealthy.
And really, it might cause more divorces among the wealthy? I had to read that twice to make sure Mr. Mankiw put it forward. Well, that one is a close call, but perhaps it is the price we must pay for reducing inequality that is contributing to ripping apart of the social and political fabric of the country.
19
The wealth taxes were removed from most European countries, why? It does not work. I'm not a big fan of republican economics but why democrats are so obsessed by increasing taxes, corporate tax, wealth tax, capital tax, always more taxes. The US government budget is close to $4T there must be ways to better spend the money. Increasing taxes is the most simplistic and easy solution to any problem. So easy. Elect me, I'll tax your rich neighbor and I'll give you the money. Politics as usual.
19
The wealth tax is a concept as old as democracy itself. And why not? It was easier to tell how many heads of livestock someone owned than how much income they “earned”. Even today, It’s a fair basis for taxing as long as done modestly.
Billionaires and multi-millionaires can sidestep income taxation even as their wealth grows exponentially. Hedge fund managers and real estate developers can claim no income even as their balance sheet’s net assets soar. Is that fair?
8
Here comes the scare tactics, expect them to only escalate. Socialism for the wealthy and rugged capitalism for the working class.
19
I read the article from Larry Summers and Natasha Sarin which the New York Times refer to. It doesn't mainly say what the NYT claim the article mainly says, just the opposite (the article sort of says it a bit, but it's not its main point). What professors Summers and Sarin mostly say is the opposite. The best way to reduce power from oligarchs and plutocrats is by first broadening the tax base. Sarin and Summers want to close tax loopholes for the rich, first. Basically the professors point out that the wealthiest and powerful can invest, tax free into all sorts of consultancies and foundations (let alone universities) which are used to influence voters, media and politicians (they give the example of the mighty NRA). If taxation doesn't strike this system of influence peddling first, a wealth tax will have the opposite effect: the mental control oligarchs exert through these tax evading loopholes will drive public opinion against taxing the wealthiest!
So Summers and Sarin, far from criticizing the principle of a wealth tax as lowering the innovation and animal spirits of society, advocate a generalization of the concept of wealth, and of taxing that first, instead. They say this guarantees thrice the tax revenue, and will avoid the backlash from the wealthiest by cutting first the very organs they use to transmit their influence on society.
5
@Patrice Ayme Forget taxation- repeal Citizens United and make all that illegal in the first place.
4
There is no moral imperative that states any individual is entitled to vast resources at the expense of many other individuals. Further, there are many powerful and practical reasons that is a terrible idea.
In deciding on whether the wealthy should be taxed more, or not, we should consider that our very Constitution puts that decision in the hands of The People. Fundamentally, The People of the US decide how our economy works. If we, The People, voted to become democratic Communists, in theory we should be able to do that. Clearly that is not going to happen any more than we're going to vote explicitly to further enrich the wealthy and give them the power to further define legal rules by which we are bound.
The rub in current system is that we vote to enrich the wealthy because there is no other choice. The Democratic party has been corrupted by, and works for the financial elite who "donate" to the party. They say and even support "liberal" stuff up to the point where they would lose money or control of the system. Then suddenly their democratic and Democratic chops evaporate.
Any legitimate economist will agree that extreme wealth concentration represents dysfunction in a capitalist market based democratic economy. The spending power of the wealth hoarded by the financial elite would far better serve the economy if it were int he hands of people who could actually spend it. Demand is ultimately what stimulates and economy. There is enormous pent up demand.
6
What have the ultra wealthy done for this country lately? They manipulate the reins of government to favor their own interests and leave the rest of us struggling. They harbor their profits in tax havens, giving their shareholders profits while forgetting the stakeholders, and rarely invest in our abundant human resources; nay, they plan to automate workers to the dustbins.
They’ve been hoarding all the productivity for years and giving precious little back. Time for a change.
11
If I'm the founder of a successful company, why innovate and invest in it over the next 25 years only to have half my ownership taken away? Instead I'd sell it immediately and move to Switzerland. A wealth tax would upend business in this country.
16
here's my plan: if corporations want to have fake headquarters and operations off shore to avoid corporate responsibility, I'd revoke the citizenship of ceos, administrators and board members and bar them from entering the country
if Trump can do it for the poor immigrant lawbreakers ...
12
Once having a lot more than others is criminalized it's only a matter of time before having more than others is criminalized.
13
Imagine not being able to afford your existing mortgage and your spouse comes home and talks about buying a bigger/better house. You’d say they’re crazy. Any tax increase should go toward paying our existing obligations.
7
Larry Summers is a "left-leaning economist"? You gotta be kidding!
12
Tax the rich or the middle class will be living in ditches with the poor. We had a 90% top rate once but the media has erased this from history. Taxing the rich will - at one turn - cure what ails this horrible country.
11
So the opposition is Steve Mnuchin, Lawrence Summers and Jamie Dimon...
Clearly this is the correct policy if the designated mouthpieces of the plutocracy are publicly whining about it.
Get 'em, Sanders and Warren!!
12
Two cents on every dollar over $50 million and three cents on every dollar over $1 billion. That's what the wealthy and corporations are complaining about? Most of us pay double or triple that in sales tax alone. If that's your argument, then you're definitely losing it. This is just more rich, white privilege whining. Good Lord!
By the way, Larry Summers is no lefty economist. He's no lefty anything.
13
If you want a dynamic, growing economy, you are going to have inequality, massive inequality. Take a look at an expert on the subject, Paul Graham, a very successful venture capitalist http://www.paulgraham.com/ineq.html .
3
Wait, so let me get this straight, Lawrence Summers, Jamie Dimon and a bush economist think that Bernie and Warren's tax plans would be bad?!!?!?!? I am SHOCKED. You’re telling me that a person who profited immensely off the financial crisis and whose company was fined billions of dollars for illegal activity in the run-up to the financial crisis, and another who advocated for the repeal of Glass-Steagall (which then led, in part, to the financial crisis), and a bush economist who oversaw the passage of the Bush tax cuts and believes tax cuts for the wealthy lead to higher growth, you're telling me that these people are all against Bernie/Warren tax plans?! 🙄 Truly groundbreaking reporting.
13
who cares if "economic growth"-which counts rapacious, life sucking financial "products"- slows if the actual quality of life for the majority increases? that's what we should be chasing: NOT growth, but rather well-being
11
They will still be rich, still able to do what rich people do. The hoarding of money is preventing the nation and it’s people to grow and prosper.
9
Facing the wealthy would bring us back to the people who wrote the Constitution. It would take the US back before the 80's when things were mostly paid for. Less than a trillion dollars debt. That includes going to the Moon and building most of the interstate highways. If! you raise taxes on the rich like Clinton did in 93 you can start to blance the budget.
If you raise the taxes on the rich they will still be able to buy anything they want. This is about the rich paying there fare percentage of taxes.
7
While a “wealth tax” is attractive socially ( clearly the accumulation of wealth in the last 50 years by the 1/10th of 1% is disgusting) I find the concept of how to calculate “wealth” difficult.
As an MBA and lawyer who has prepared a numbe4 of estate valuations as well as real property valuations for loans it’s very much an “art”. Mayhap the readers remember the article on Trumps real estate activities, aka schenanigans. In many ways it is merely an amplification of a very honest debate.
What is that ipo worth?
What is the true highest and best use?
What is an appropriate multiplier?
What are projected interesrpt and growth rates?
Massive changes to “ valuation” occur as you answer each question, and for darn sure there are a large range of answers.
Europe has tried a wealth tax, and apparently pretty much failed. For sure a attempt to value, art real estate, iPods, business startups each year old be a huge bonus and boast to accounting, real estate, appraisal and legal firms.
Mayhap we should attack the issue at the estate level. At least a problem I can envision managing.
2
Bernie doesn't like rich people, period. But it is hard to see how a wealth tax at the levels Warren and Sanders are talking about could retard growth. Currently, each dollar gets spent only 1.4 times a year in the United States. That's the lowest since at least the Great Depression years of the 1930s. Too much money is obviously tied up in unproductive luxury goods. Pay millions for old paintings, huge homes, antique cars, and jewelry and the money gets tied up. It stops moving and creating jobs and general societal wellbeing.
7
Ms. Warren’s proposal would hit about 70,000 households and generate $2.6 trillion in revenue for the federal government over a decade. They project that Mr. Sanders’s proposal would apply to 180,000 households and raise $4.35 trillion over 10 years.
I can’t think of any other way for Americans to get their hard earned money back from the thieves who took it from them.
7
I have another view! How about we look at a European model for taxation. Value Added Tax......or VAT. This type of tax is spread through the system and based on goods bought and sold all through the process of bringing a "product", what ever that product is, to the market place. The big difference that the United States uses is an entirely different type of taxation with each state creating and using a different style and type. In Oregon we have no sales tax at a register. But we do have a great deal of hidden tax for city, county, and state. Building a National standard like the VAT would then place the tax into CONSUMPTION. And like many places it is then built into the price of the item. When people go to the pump in Oregon and many other states, they pay the price of the fuel that is shown at the pump. They do not list a price for fuel and then add on the tax AFTER they fuel up. It is built into the price. VAT would solve all of the issues and still supply funding without attacking any level of consumer. If someone wanted a 4 million dollar boat......then the VAT would be included into the transaction under law. No hedging, no hiding! Food for thought!
4
We don’t need one more dollar of economic growth when almost all of it goes to the uber wealthy. We are talking about the billionaires. Policy and tax laws have allowed them to skim and out right take from the workers in our country. Yes, redistribute the wealth to those doing the work. Rich people are fine, the billionaires are taking from society and it needs to stop.
7
The same doom and gloom predictions came when Obama was running for President, but he got us OUT of a Republican recession (almost depression). Where are our memories?
6
Why focus on the billionaires? People like Warren Buffet is already donating millions to causes. Why not start with the wealthy politicians? Why should they make more money than a farm worker?
1
The call for a wealth tax is the long overdue call to address the increasing income inequality of the US.
That increasing income inequality is what drives political polarization in the US - and led to Trump
If people are upset about it, they need to complain to economists that preached the virtue of free trade. Larry Sumner is one, Paul Krugman is another.
Owners of capital (factories) profited from tariff free trade with low wage countries - their profits increased as they outsourced manufacturing jobs - whereas the working class did not. Au contraire, their well paying jobs disappeared
But to tax wealth is not the best method to address the problem. Much better is to do what Sweden does : Tax the INCOME from wealth. Brutally.
Your $ 20 million Degas painting hanging on the wall does not produce income. But when you sell it, it does.
Tax that, and distribute it to the less well off.
This is precisely what Sweden does - and Sweden eliminated the wealth tax in 2007.
Too difficult too collect, too easily circumvented.
Economists and business leaders better figure out a way for economic growth to benefit the average wage earner with healthcare , retirement and educational benefits, or they can kiss this economy good-bye. Warren and Sanders may be asking the government to do to much for the average man, but this economy is serving no one but the very rich. It is pointless.
6
When conservatives bring up that the ultra wealthy might give less to charity if a policy is enacted, I am even more eager for that policy. Why do the ultra wealthy get to decide what is best for all of us? They aren’t nobility and we aren’t their serfs.
5
Does this mean that it's time to start investing in real estate in the Cayman Islands?
2
All you’d need is a single small office building. With lots of mailboxes.
1
Just the opposite. A drastic shift in tax policy will give back our country its middle class which was once the envy of the world and gave us stability.
5
No one really talks about the standard of living that has changed over the years. The bar has been raised dramatically since Reagan's deregulation, and the adrenaline hasn't chilled out yet. Maybe it's time to bring the money addicted down to earth---the financial hocus pocus like stock buy backs, derivatives, M & As, corporate raiding may be good for the shareholders and investors who are able to buy lots of art and assorted homes, but it does nothing for the rest of us who barely have the paint to create the art or the money to afford our neighborhoods anymore once their assorted homes start procreating into our hoods.
Elizabeth Warren is right to question the old trickle down moldy chestnut.
3
You can do as Elizabeth Warren and Bernie Sanders suggest. It won't "sap growth". There can be growth. What it would sap is the Republican conspiracy with Wall Street to run bubbles in which the wealthy people and corporations, the people who have money-making-money by speculating with money, profit during the bubble, and during the crash. That system works for them, because they privatize wealth and socialize risk. When the banks break after a predatory orgy, and cause global recessions, the Government uses the Peoples tax money to re-capitalize them, so they can de-regulate and run the same scam all over again. You can literally hand tax money to a wino on the street, and it would do more for the economy than the game Wall Street plays.
4
No worries. Nothings going to change as long as gop has the senate. Let Bernie and warren scream and shout all they want. They may not even have the house judging from the way these 2 are intent in driving reasonable people away from voting for them or the Dems.
3
Much of what I read here in the article is the same arguments about raising taxes on the wealthy that have been passed around for decades. Remember the estate tax, which now affects something like 130 families. and how it keeps getting nicked to smaller and smaller levels while the national debt balloons while oligarch families apply more pressure to Congress? I think the wealth tax and estate tax have/had similar goals which are/were to keep huge fortunes developing oligarchs with the power to essentially run the country. Yes, people might make a fortune, but in the end they owe the country for the services we the little people provided them via taxes we paid. I do dislike all the whining from the disgustingly wealthy. I also find it a farce that the wealthy with their accountants and lawyers can outsmart Congress unless Congress intentionally writes loopholes in the bills to be discovered and used.
4
So, at most, we're talking about a higher tax bill for 180,000 households. And we're supposed to believe taxing them will destroy the economy?
Critics: Please provide evidence that the financial investments of these households are as crucial to the economy as you claim.
Anti-taxers always try to transfer the tax worries of the rich onto workers. "Taxing capital will disincentivize you workers!" How???
4
So Jamie Dimon says the wealthy "just think [the proceeds of a wealth tax will] be wasted and be given to interest groups and stuff like that."
He's right. See: TARP.
5
“Progressive Democrats are advocating the most drastic shift in tax policy in over a century…”
Really?! A 2% tax on extreme wealth is more “drastic” than the 90% tax brackets of the middle of the last century? more drastic than the current scheme of letting the rich pay next to nothing (after loopholes), while forcing today’s children to pay off our deficits in the future, with earnings from their low-wage jobs? New York Times, be the New York Times, not Breitbart!
The "wealth tax" is a great tag line for the election. Like Trump's wall, it is easy to understand and catchy. Unlike Trump's wall, it references a real problem that the nation must face, although it would be better implemented as part of real tax reform, something the Trumpists failed to deliver.
A 2% tax on wealth so vast that the wealthy do not know what to do with it would scarcely hurt the wealthy, who, in fact, create few jobs. Most of what they do create pays wages so low that the middle class is vanishing. If changes to taxation could restore the middle class, the economy would truly grow, because it is the middle class that creates, by far, the most and highest paying jobs, when the middle class can afford to start their own businesses, rather than starve by either not working, or working for the wealthy.
4
So, a call to MAGA can be derided as pining for a bygone era and all the racism and sexism and patriarchy that goes with it since they cannot be parsed from the Leave It To Beaver memories. Yet the left can swoon over Eisenhower era tax tables which can be embraced independent of those same factors?
2
Can't imagine a worse economic plan.
Why don't we just send a gilded re-election invitation to Trump?
8
Not that this would effect me, but where does society get the right to just take what someone else has earned?
13
Saunders has the most aggressive plan raising an additional 4.35 trillion over 10 years. Unfortunately even this wouldn’t get us close to even. We ran about a trillion dollar deficit last year and assuming we run at that same pace we’d only get half way to even. How can we afford new programs?
2
This is the whole idea. "We need an economy that works for all of us and not just a privileged few." It looks to me like the monopolistic capitalists are circling the wagons here. Ms. Warren and Mr. Sanders believe in free enterprise and they want to reward individual initiative. They just don't believe in monopolistic capitalism that stifles creativity and free enterprise. Stop trying scare everyone with propaganda talking points to perpetuate the greedy avarice of the megawealthy1%. Enough is enough and some of us have had more than enough of rewarding the wealthiest among us at the expense of the vast majority of Americans.
3
Elizabeth Warren is smarter than Larry Summers. Makes sense that she would arrive at the right answer and he is still dawdling for the plutocrats.
3
Let's not forget that these ideas will have to pass thru both houses of congress, so they will surely be watered down considerably. Personally, I think a one-percent wealth tax would be more acceptable to many people. But there must be more fair income tax on ALL income, an end to the nonsense people like Bezos get away with.
1
“I know a lot of wealthy people who would be happy to pay more in taxes; they just think it’ll be wasted and be given to interest groups and stuff like that,” says Dimon of Goldman-Sachs.
Hey Jamie, what do you mean by “interest groups”? I’m just curious.
1
Ned, Ned, Ned what planet have you been living on since Reagan? Trickle down, voodoo economics and now tax breaks for the rich will encourage growth???? Perhaps self growth.
And no, without millions of people supporting an invention or what have you, there aren't any millionaires or billionaires. It takes all of us to make one person rich, you cannot become rich on a planet without others on it.
And as far as your hopefulness about becoming a philanthropist...eg, trump's foundation worked out well....for him (just another tax right off for going bankrupt) and purchasing a portrait of himself.
1
Dear 1% and your favorite newspaper; Dont worry about Bernie or Sen Warren. The leadership of the Democratic party is with you and they will make sure to deny the nomination to either of these "dangerous" candidates. The democratic leadership (Debbie Wasserman Shultz) stopped Bernie and Bernie can be stopped again!) Russian interference my behind!!
2
They are a joke. The argument about income inequality is based on the false assumption that "income" is finite. That the Dems want to take income from one earner to pay another and or bring the high earner into line with the lower earner. Just stupid. Income isn't finite. Everybody has the ability to be a high earner... or earn more than what they are currently making. But that depends on the individual and the Dems don't trust individuals - very paternalistic and condescending - to earn and better themselves. So they start a wealth war between those with and those who are jealous of what others have. Real sad.
8
Go Warren!
1
Reading these comments, I want to eat the rich.
"Left-leaning economists have expressed their own doubts about a wealth tax. ...Lawrence Summers..." ??? Who ever confused Larry Summers with anyone 'left-leaning'??? That's worthy of an official correction!
2
I love how Republicans call this "wealth redistribution" umm.... Republican tax policy has always redistributed wealtb... up.
Google Andrew Yang
"But the idea of redistributing wealth by targeting billionaires is stirring fierce debates at the highest ranks of academia and business, with opponents arguing it would cripple economic growth, sap the motivation of entrepreneurs who aspire to be multimillionaires and set off a search for loopholes.
“You’re going to completely disincentivize capital investment, which is going to be very, very bad for economic growth,” Treasury Secretary Steven Mnuchin said in an interview in September. "
OH PLEASE. WHAT a tired, old, self-serving, inaccurate comment that is. Our economy was AT its BEST when the taxes on wealthier individuals were at 70 and even 90%. After Reagan, it all went to hell in a hand-basket. Our economy is sick right now. It is lopsided and unfair to the majority of Americans. These individuals who spout this drivel are doing it to protect their OWN wealth, their OWN interests. The tax Act of 2017 did NOTHING to stimulate the economy, did NOTHING to create jobs, did NOTHING to close loopholes, but rather supported the buy back of stocks instead,creating even more wealth for a select few. Enough of this nonsense. Enough of the oligarchical control of our government. The people need to take it back.
1
Next stop, Venezuela.
6
America has a serious problem with wealth and income inequality. Not sure if this is the best way to address the problem, but how about raising the minimum wage, increase tax on capital gains, increase property taxes. The most important thing would be to get health care cost under control, so the cost of health care in America is not the current double that of countries with universal health care.
1
The fantastically destructive paradigm of growth or rise as an indicator of the health and well-being of our culture is long overdue for a climate-emergency shift. More sustainable would a carbon neutral and happiness index as calculations we might hitch our economy to moving forward.
1
People in other democracies who pay large taxes for social insurance, single-payer health care, and cheap or even free college tuition are motivated by altruism for their countrymen and countrywomen that Americans simply lack.
It will take an outright shift in society-wide attitudes that no fellow citizen should have to go into debt, or even pay out of pocket, for these things, and I'm afraid that we just don't have that kind of unified spirit. I wish we did, but it will take much greater feats of leadership than just pushing a tax increase through Congress. Which Democrat running for president is up for it?
1
I did the math on my desk calculator. If you take 2% every year, you're still left with 50% of your initial fortune after 35 years. If you take 8% per year, it takes 9 years to get down to 50%.
AND ... the wealth tax only applies to fortunes greater than $50 million. Someone starting with $100 million today will still have over $50 million in 2053. Yes, I know, with inflation being what it is, $50 million won't buy as much in 2053 as it buys today. On the other hand, most folks with $100 million don't leave it in investments paying zero percent, so it's very likely that a 2% wealth tax will still allow the very wealthy to continue getting richer and richer as time goes by. Maybe a 2% wealth tax is too small.
But even if all the rich people found their fortunes whittled down to a mere $50 million, they would then be exempt from the wealth tax. Most of them are still going to be able to keep a roof over their heads and food on the table.
2
@Boneisha
That's exactly what they said about the 16th amendment too.
Without the wealthy, we don't get next generation fabs built https://www.anandtech.com/show/12377/tsmc-starts-to-build-fab-18-5nm-in-early-2020 .
1
How does allowing a very few families to sit on vast wealth in any way "sap economic growth?" Raising the minimum wage, raising taxes on the rich, etc, etc, we're all supposed to do the same thing. None of those policies " sapped economic growth" unless watching stock portfolios grow is your only measure. In short, the policies, the history, the parameters and the very measure of our economy has been tilted to keep the very rich in power. It is past time for the system to be changed to benefit society, not oligarchy.
6
The NYT loves punching left. This article honestly feels more like a thinly-veiled editorial, it's tilted so far to the right.
For instance, the idea that Summers is "left-leaning" is laughable. He's maybe a centrist at best, but what he really is might best be termed a statusquoist.
Most of the "dangers" listed in this article are the same "dangers" that are listed whenever anyone proposes doing anything to correct the imbalanced distribution of wealth in this country. And when the progressive thing works, somehow none of these experts suffer loss of reputation for being so wrong.
6
Jamie Dimon sayd:: “I know a lot of wealthy people who would be happy to pay more in taxes; they just think it’ll be wasted and be given to interest groups and stuff like that,” Mr. Dimon said.
What complete and utter arrogance. Can't Dimon come up with anything lamer and more ridiculous than that to explain why the the system should create and more more billionaires, while they pay their employees so little that many are on food stamps and just one pay check from bankruptcy?
5
Why should someone who pays full price to put their kid(s) through an Ivy be expected to fund someone else’s kid at CUNY? Why should Walmart pay school taxes beyond the grades required to provide sufficient instruction to their employee base?
2
"...would undermine business confidence, reduce investment, degrade economic efficiency and punish success..."
I don't buy this shallow, defensive argument at all.
Investors aren't going to invest because they can only make a billion dollars rather than two billion?
I think Sanders and Warren need to go farther by including a provision which penalizes companies that made fortunes in America and then threaten to move overseas---forever putting to bed that idiotic, anti-American argument that, "We'll move overseas if our taxes go up".
AND, if we take healthcare off their plates--translating to an enormous boost to their collective bottom lines--they should be leaping for joy to pay their fare share in taxes.
2
Right. Let’s all listen to Steve Munchin’s evaluation of the wealth tax. Ha!
4
What are Democrats thinking, playing right into Trump's hand. Ouch, ouch, ouch, Four More Years. Then what?
1
It's time to share the wealth, you guys;
it's time to spread the jam --
so ev'rybody gets enough
to roast a leg of lamb.
Ms. Warren and old Bernie
will squeeze blood from plutocrats,
and make 'em sorry that they ever
wore white silken spats!
When I get mine -- you betcha! --
I will dance a blithe gavotte,
and fish for carp the live-long day
upon my spacious yacht!
If class conflict and other people’s money is your fix for economic decline you’re doomed to failure.
7
No needs a billion dollars. If Steven Mnuchin is opposed to taxing the rich, then you know it's good for the American workers.
6
Wow. The only thing that this article is missing is a quote from Joe the Plumber complaining “it’s so unfair and it’s going to hurt me when I make it big and I’m in the billionaires club”
5
And if the feared reshaping if the American economy came about, with it multidimensionaluties, along with lessening the financial state of the super -wealthy, who would continue to BE super wealthy, how would this effect, in theory:
A divided nation?
America’s diverse Peoples?
America’s rooted, anchored, WE-THEY daily violating culture?
America’s personally unaccountable policymakers, elected and selected, at ALL levels? All over America?
American racism?
Institutionalized discrimination?
Structural exclusion and marginalization?
Dehumanization as an ongoing norm?
The politicalization of the judiciary, including the Supreme Court?
The misuse of power by prosecutors, district attorneys, sheriffs, police, immigration staff, etc?
A fragmented “turf-bound” education system which, in an era of endless data and derived information, amidst available and accessible generalizable facts, has failed to help people to effectively discern between knowing and understanding? Between facts, fictions, fantasies and mantrafying “alt-facts?”
A culture” addicted” to winners. fearing failing and losers and thus limiting the ability to “Fail better?”
1
The bias inherent in the lede and the general "growth" (addiction) language in this article is guaranteed to maintain the status quo:
How does "a 2 percent tax on households worth over $50 million, which is the heart of Ms. Warren’s plan" "shrink the fortunes of the richest Americans" ??
2
The argument that boils down to basically:
Progressive taxation is bad because wealthy people wont try as hard or invest as much because any increase in fortune comes with an increase in tax is the dumbest most blatantly dishonest faux logic ever offered to the American people.
You have to understand that... right or left.... it is the rich vs everyone else ideological divide that truly defines things.
When you hear arguments telling you why its bad to demand a fair investment from the rich.... ALWAYS apply your strongest skepticism
This argument is laughable.
Lets use income since its easier to understand:
If i work harder, cut more deals, and earn $10 milllion more on paper it will not actually be worth the time and expense because that marginal increase will be taxed and so the actual take home amount will be lower.
Why this is an uttery laughable lie:
ANY MONEY is more money
More money is always better.
$10 million is just a number on paper. If you want to be cheaky you can refer to it as the post-tax number.
And wealth tax?
the idea that billionaires wont try as hard.... look for new startups to fund.... give as much to charity, etc. Because their accumulated wealth will grow at prevailing market rate - 0.03x is similarly disgustingly dishonest.
Im surprised no one has thrown a rotten tomatoe at these "economists" lying through their teeth.
Here is 1 among many obvious reasons:
you have 0.03x depreciation due to tax?
invest MORE to grow EVEN FASTER
2
It's just amazing to see the number of commenters on this thread who don't know the difference between wealth and income.
1
Larry Summers is a “left-leaning economist”???
Sure, he was a Bill Clinton adviser, but before that he was in Reagan’s cabinet. In between those stents, he wrote a wonderful little paper for the World Bank on why it’s fine and dandy to dump toxic waste in poor countries, because those people have a lower life-expectancy.
The Times is quite liberal on social issues, but on economic issues, the are basically 1980s moderate Republicans.
6
Come on, NYTimes, leave this type of regressive opining to the right-wing rags. The idea is ridiculous that higher taxes on people who already have more money than they know what to do with would cripple growth and entrepreneurship.
The fact that you had to quote Mnuchin, of all people, bolsters my point.
7
Democrats will reshape the US into the third world country they want it to be. Trump 2020.
5
Respectfully, I see the complete opposite.
Trump 2020 will continue our descent into a third world banana republic.
2
@M
Trump became president by promising to "Make America Great Again." You might benefit by looking up what the tax rate on the wealthy was back when American was "great." (hint: It was more than double what it is now.)
2
I prefer donations to the needy at the end of one's life, but, because the wealth inequality has gotten so egregious given estate tax loopholes, I support the Sanders/Warren plans.
The root cause of the wealth inequality is the fixed pattern of rich get richer while the poor stay poor. Why is it fixed? Because a vast majority of the wealthy parents pass on the wealth to their children.
Our current system rewards even those who are less productive as long as their parents are wealthy. On the contrary, children of the less fortunate families can only hope to inherit something let alone be left behind a heavy debt burden due to debts racked up such as student loans. This isn't capitalism as originally intended.
The fixed pattern of poor stay poor is so rigid that most children of less fortunate families can’t dig themselves out of the hole.
Loving your child is indeed a wonderful feeling. However, if that love is reserved only for your child without regard to others, then it'll shape itself into an act of selfishness.
In lieu of monetary wealth, leave your child a wealth of heartful memories from the highs and lows of life shared together.
And then, as for the monetary wealth that remains even at the end of your life, return it to the wider society for the benefit of those who are less fortunate. In the form of estate tax or, even better, donation to those who need it the most.
3
Re:.. It saddens me that some reputable economists such as Larry Summers see their futures tied to the oligarchs who build Harvard's endowment to absurd levels
Economics is more akin to religion - you adhere to a faith, not facts that are to complex to get at them with simple models.
Hence, just as in religion, there are competing belief systems. And just as in religion, they various adherents can not agree, except all the others are wrong
There's the salt water school, the behavioral school, the neo Keynesian school, the Austrian school, the MMT school .. to name a few
The most successful economists are those who formulate theories that please the rich. And that control the elite Universities Summers is one
2
Redistributing money to a broader portion of society takes it out of hoarders piles and puts it to work revitalizing communities and the economy.
I look forward to the investment creativity.
3
That’s a wonderful sentiment. That is, until the definition of a “pile” coincides with your income and it’s your pike being confiscated.
1
Tax loopholes should be closed so that the super-wealthy are forced to pay their fair share of taxes. American companies own 50% of the world's wealth while paying little to no taxes. Large companies have engaged in complex tax-evasion schemes while underpaying their employees who create the wealth and have contributed to the widening income gap between them and the working and middle class. If most educated individuals cannot buy a house due to massive student loans, and unaffordable health insurance, expect the economy to eventually shrink. Trickle down economics doesn't work. Income redistribution creates a more balanced, happier, and safer society and should be the norm in the developed world. These scare tactics about how income redistribution is bad will drive voters away from the Democratic party and will only help Trump get re-elected.
1
Just remember many of us are invested in the market with our pensions and 401k. Yes you're in the bond and stock market so vote accordingly for pro growth
2
I propose a substantial federal homeowner tax based on the square feet of the residence. Any home in excess of 4000 sq. ft. would be heavily taxed on a yearly basis. Large homes burden the environment and have a huge carbon footprint.
Conservative response to any economic initiative is the same “it’ll take incentive away.”
If it is profitable to invest, investors will invest. “Investor confidence” is fickle and not a real indicator of a healthy economy. You also do not need to be mega wealthy in order to invest.
Capital flight is a more likely SYMPTOM of a bad economy than it is a CAUSE. Capital flight is more likely to occur when a government defaults on its debts, rather than when it taxes its highest holders of wealth. Doing nothing is more risky than these wealth tax ideas.
Social security is in jeopardy. It’s scheduled to exhaust its reserve by 2035. Can’t scrap it, that would leave over 20 million in poverty. Can’t privatize it, the reason it works is because it’s kept out of the stock market. Can’t let the govt do a little gambling with it, as that approaches a “planned economy.” Government should only respond to economic distress, not dabble in demand side.
How about the incentives of small business entrepreneurs? Not everyone aims to make a billion dollars. These would not be hurt by a wealth tax. How about we promote an economy that everyone fuels?
There are new closes to loopholes, in FATCA. US mega wealth would have a hard time evading taxes like those in the EU, and these proposals tax the mega-rich, not just the “sorta” rich like Europe has attempted.
2
Those astute economists with their impeccable credentials, like Mr. Mankiw and Summers, with all due respect, are blinded by their simplistic, dogmatic Econ. 101 mindset relating to supply, demand and incentives. If it costs more, there will be less of it!!!
Maybe they should take Psych. 101, if not Behavioral Econ. 101?
Ask most entrepreneurs if a 2% tax on everything OVER $50 MIL. would have dissuaded them from taking risks and working 100 hours a week chasing a dream, and I'm pretty sure almost all of them would say "absolutely not."
The economists lack an awareness of what is really behind the entrepreneur's spirit.
Mark Cuban has made this point many times, as to the general idea that higher tax rates would discourage entrepreneurism.
3
I despair. How to choose between crazy right-wing politicians and left-wingers making irresponsible promises that are harmful and impractical? I want to vote against all of them.
Let's see.
Billionaires holding stock in public companies would have to sell some stock every year. What conflicts arise between the interests of ordinary stockholders and billionaires who have to engineer sales every year to pay their taxes? What would this do to the price of the company's stock? If it goes down, the amount left to tax in the next year goes down.
More difficult: How to value a privately held company? Do we force owners to make public offerings so they can pay their tax bills? Sounds pretty destructive to me.
Land: how do we value it? Will taxability force ranches and other holdings to be split up? Will it force development of land no one wants to see sold? Will it force decline in land values, thereby reducing values which can be taxed in the future?
Art and valuables: Why would rich people hold art at all if they are forced to pay annual taxes on it? Forced sale of art will collapse prices, but this might be great for museums.
There are better solutions. Try higher income taxes with fewer loopholes, higher estate taxes and coordination of capital gains with the estate tax system.
Come on, Democrats, get your heads on straight. You may not be able to afford everything you want to do, but you can accomplish a lot if you'd just be more realistic.
2
@john640You don't need to hypothesize about these things - these tax policies and business norms were actually enacted from the 1930s-1960s at an even higher level, and that was a golden age of capitalism in the U.S. and abroad.
1
@JS
You don't need to hypothesize about these things - these tax policies and business norms were actually enacted from the 1930s-1960s at an even higher level
Actually we have never had a wealth tax, you are completely incorrect. You are one of the many on this thread who confuse income with wealth.
We did have higher top income tax rates in the period you reference but they were matched with higher personal and business tax deductions that we don't have today. Studies have shown that the actual effective collection at the 90% rate wasn't really different that what it is today with lower rates.
2
Sort of hard to see how Warren's plans for restoring competition and supporting technological progress is a grave threat to a system that claims it is good for humanity because of its competition and technological progress.
4
It wpuld also take the country back to a time when the wealthy paid their fair share. Graduated l income tax is equitable and it is one of the only things that actually belongs MAGA.
1
I'm not against billionaires. I actually think we need a few. I don't like the idea of living in a monopole society. There has to be a number of sources of power and they should be of many different types. But some things that are being said here are silly. Does anyone think that Bill Gates, Jeff Bezos, Elon Musk, Sergey Brin or Stephen Zuckerburg are motivated by money? Really now what is the difference between say five billion and twenty five billion? It is probably just a much greater administrative burden. They all are caught up in the challenge posed by a vision they had of how to set up something of great effectiveness and benefit. If you don't grasp that you are just not thinking that hard about human behavior. There are plenty of money grubbing millionaires around but those guys simply have moved past the point where what they earn by the hard work they do makes any difference to them. They could probably give away half of their fortunes and still be as driven as ever. In fact someone who would stop trying if his fortune were cut down by ten or fifteen percent probably isn't doing anything that important for society anyway. We don't need that kind of effort.
1
Since all else is subjective, wealth is capitalism’s only true score card. Thus, Jeff Bezos is better than David Koch who is better than Alice Walton who is better than Michael Bloomberg. And so on.
Without debating the merits, as David Brooks suggested, neither plan to tax the assets of the rich will pass the 60 vote Senate test. So these ideas are just ideas. Too bad news articles generally don’t report this problem.
1
The concept of taxing unrealized capital gains during a taxpayer's life would be new in the US tax system, I believe. Large estates deal with a tax on unrealized capital gains -- assets get marked to market as of the date of death -- but good estate planning goes a long way to minimizing such taxes. The challenges of coming up with a point estimate of non-public financial assets would likely create lots of jobs in the valuation business, and maybe the IRS would employ the same sort of lack of control and liquidity discounts currently permitted in estate tax valuations. Perhaps the IRS will also start accepting payment in stock as a means of dealing with the case of a young tech entrepreneur who has modest liquid assets, but has an estimated $70 million in stock of a company that is a few years away from going public, and would be subject to a $400,000 annual wealth tax under the Warren plan. The value of that stock could rise, or fall to zero, but other than borrowing to pay the tax (using the stock as collateral), or selling it to another shareholder in the private company (to the extent permitted in the shareholder's agreement; and I assume capital gains taxes would also be due because of the sale), it is hard to see how the young tech entrepreneur could fund the wealth tax obligation. Also, it would not be surprising to see many wealthy people try to engineer their assets to come in just under the tax threshold -- lots of $49 million portfolios.
If this were about risks of imposing economic sanctions on, say, Russia it would quickly be decried as propaganda. But, because this is propagating a message that benefits the wealthiest Americans, it's not seen as such.
1
Once again, a one-sided argument. Setting aside the fact that the wealth tax has not been in place since 1982, there is no discussion of how that 2% wealth tax would have impacted American society as a whole. How many more homes would have been purchased by those who did not face student loan payments, medical payments, etc.?
Like so many other proposals that "upset the apple cart," we need to consider the entire impact - positive, negative, and neutral - on individuals and society.
Simply lamenting what might have happened to the Waltons (perhaps they would not have expanded Walmart...and we'd still have local grocers) or Jeff Bezos (perhaps a local or regional mini-Amazon might have had a chance to prosper) ignores the potential that might have resulted in a greater gross happiness - and productivity - across the nation.
2
Needed in this discussion is a review of Henry George's 19th Century book Progress and Poverty, wherein he argued for a tax on natural resource rents (what he called land), which would supplant all current taxes on wage labor and capital goods. Many contemporary economists have endorsed this approach, and computer power makes it demonstrably feasible. For more explication of a tax on resource rents (i.e., on land values) as practiced in many places already, see www.schalkenbach.org, and the many affiliates of Georgist organizations worldwide at www.cgocouncil.org.
Rent is the perfect tax base, as it comports with all the textbook principles of sound tax theory. A land
value tax is completely neutral, totally efficient, highly progressive, easily administered, reliably stable,
simple to understand, and impossible to avoid. Computer power now makes a rent tax easily applicable and understood. And those with no title to land of any sort are totally free of taxation.
Prof Stiglitz writes, "One of the general principles of taxation is that one should tax factors that are inelastic in supply, since there are no adverse supply side effects. Land does not disappear when it is taxed. Henry George, a great progressive of the late nineteenth century, argued, partly on
this basis, for a land tax. It is ironic that rather than following this dictum, the United States has been doing just the opposite through its preferential treatment of capital gains."
The question, particularly with Sanders plan, is that ongoing social services will be funded with a temporary windfall. As more and more wealth is siphoned off, there will be less and less to tax, eventually the revenue will shrink and they’ll have to find another source of revenue.
5
To the economists and business leaders who are worried: I'm tired of being trickled down on.
After 40 years I'm ready to try something different - perhaps reducing the share of wealth held by the 0.1% from 20% to 10% and putting the difference into healthcare, education and infrastructure. Of course this might be a big mistake, but I'm willing to take a chance.
(I'd also be willing to take a chance on a smaller "Defense" budget with the money being similarly re-purposed.)
5
Hey # Gary-A,
You are willing to take a chance? That is very generous of you. BTW, Whose many are you willing to take a chance with. It sure doesn’t sound like you mean your own.
“You’re going to completely disincentivize capital investment, which is going to be very, very bad for economic growth,” Treasury Secretary Steven Mnuchin
The recent huge GOP corporate tax cut bill did not result in significant capital investment if any...capital investment is spurred by demand. Demand is created by the masses doing well economically. The HW Bush Tax increase led to the booming 1990s under Clinton along with a couple of years of actual Federal surpluses... Cutting taxes on the 'Job Creators' is the standard GOP mantra that has largely failed for the last 40 years..... How many yachts and houses to the 1%ers need to be happy anyway?
4
Oh no! If these plans would "sap
economic growth" then we should
immediately abandon them, since economic growth is what solves all problems with society. Just look around: economic growth has made the shining city on the hill that is our perfect and harmonious country today.
2
The economists quoted here are just court astrologers for the rich. There is no actual proof of any of their ideas. Just pleasing words to curry favor with the wealthy in the hopes of landing a plumb think tank job.
3
I have two concerns:
1. We live in a big world. If we abolish billionaires, won't other countries, based on their own wealthy class, pass up the United States in power? There are governments, and there is Warren Buffett and Bill Gates. Don't individual influences offer key strength for a country? This quote from Bernie Sanders makes me very uncomfortable:
"He said last week that he did not believe billionaires should exist in the United States."
2. How high can we raise the floor and how low can we lower the ceiling? Every society has economic winers and losers. And socialist countries have drastic (poor) results. If one of us had 1 billion dollars and we could save 500 million by making a move to another location -- who wouldn't do that? Many could simply move their prmary residence to Puerto Rico, which has no federal income tax. Or change their nationality.
Who is going to count someone else's wealth? A legion of federal workers that are trying to place value on a shared aircraft, a baseball card in a shoe box, or a non-Rembrandt painting from a new artist that skyrockets overnight? Then the wealthy's attorneys will br protetsing valuations of hard assets -- for years and years.
Income inequality does create serious societal tension and we are there -- but I strongly prefer a universal basic income that moves the needle so that the middle class can afford our daily cost of living. Then let's re-assess.
2
Aren’t Americans 40% more productive than 50 years ago? If that’s even remotely true the wealthy have been taxing all of our labor and robing is of our due.
Wasn’t it some of the founders who state that labor should keep all its wealth? There was a reason for that. The irony is that those of us who can afford it the least pay these rich people 40% more than they deserve and nearly 40% of our income to maintain society.
Time to step up. If capital flees hold them accountable with denying them access to the US market and opening the doors to people who do want to participate in society. We don’t need these people who believe they are above the law, outside it or beyond participating in society.
2
@Mathias. What law are you talking about?
Since the oligarchs are so good at making money it's imperative that their money be taken from them, otherwise what incentive will they have to make more money for the rest of us? That way those of us who are good at writing poetry or curing cancer can have sufficient incentive to do so as well.
Is a tax system that redistributes wealth from the wealthy to the masses really worse the tax system we have today, one that redistributes wealth from the masses to the wealthy?
And as far as being a disincentive:
1. Bill Gates (for instance) didn't do what he did in order to get wealthy beyond imagination. He was driven to create and innovate, not to bank a hundred billion dollars. The fact that he is giving it away belies and motivation of greed on such a monumental scale.
2. If a wealthy person truly were motivated only by making a billion dollars, taxing away a minute portion of that is only going to make him (her) work harder to get to a billion. So this kind of tax would be an incentive.
It's an insult to the successful wealthy people to say they only want to hoard money, not innovate and build and be successful. And it's a second insult to them to think that because they have only eighty million instead of a hundred million that they will stop working.
2
Capitalism through time can only increase inequality. Simple math dictates that the rich get richer because their money can grow faster, tax free most of the time. A 10% rise in the S and P for someone with 1000 will net you 100 bucks that year. For someone with 1 billion that will net you 100 million.
So Gates and the like might have 10 billion instead of 50 or 80. Im sure he will survive.
2
The top 20% own about 90% of everything in the country so any efforts EW - or any other Democrat - can make on tax policy that shapes economic activity toward rectifying this imbalance will be good for 80% of the country.
3
Today, while in a doctor’s waiting room, I started flipping through the glossy pages of a large format, D.C. “ style” magazine whose pages were crammed with advertisements, articles, and commentary on the most absurdly expensive luxury goods, services, and dwellings clearly aimed at the 0.1percenters and those above. If these people can readily fork over vast discretionary sums for these baubles and vanity purchases surely they can do their modest part to help correct one of the most urgent problems confronting democratic societies today, staggering yet still growing income inequality.
2
Watch out, the scare tactics will only escalate.
3
I am not too worked up by their tears and fear mongering. None of these business leaders complained when the 'tax cut' raised my taxes by $3200. Nor did they complain when health insurance premiums in our little office shot up by 135% over 2 years.
5
@Mark. It wasn’t tax cuts that raised your taxes. It was capping your SALT deductions that the rest of us were subsidizing.
@Jackson
You are mistaken. You're confusing my tax increases with the tax cuts for the billionaires. The deficit caused by your pals Trump, McConnell and Ryan will be paid by you and your children for the rest of your lives.
1
The inequities are due to stupidly low tax rates which do not just starve the commons of needed funds but all but the rich. Restoring tax rates that cover the needs of budgeted government services but do so with a progressive structure of tax rates will remedy the problem over time. To offset the political power of the super rich, voters need to stop relying upon marketing information to make their decisions.
The solution offered by Warren and Sanders is a quick fix which amounts to seizure and conversion of assets just because some have more of them. It's not a way offered by our system of government but outside of it. Only an extreme emergency could justify such an act.
1
"The wealth taxes under discussion would deal a major blow to the balance sheets of American plutocrats like Jeff Bezos, Bill Gates and Warren Buffett. If the tax that Ms. Warren has called for had been in place since 1982, the net worth of the 15 richest Americans in 2018 would have been half as much, according to two economists who helped develop her plan"
A major blow? One can argue they earned "monopoly" wealth for years. In one case, through anti-competitive practices and the other, through a near natural monopoly created through a technology platform.
Reducing Mr. Bezos' wealth from $107B to $53.5B Does anybody really believe he would be affected by such a reduction in wealth? Does anybody really understand $1 billion?
3
The only tax Warren should advocate for is a gas tax and fossil fuels tax to pay down our 22 trillion dollars in debt; after all, a gigantic proportion of that money was spent on American wars to benefit big oil.
Our national debt is obscene and that is just as bad a legacy as the environmental burden we will leave our children.
3
The national debt is a red herring dragged out by Republicans to cut the safety net.
1
The wealthiest people I know started businesses, employ hundreds of people, have taken financial risks, and work their tails off. Some people made their millions off government corruption, but if you put more money into government won’t we get even more of those.
7
@Bk2 one sane person in a sea of misguided logic, class warfare and envy. Billionaires please keep your money. Putting capital at risk deserves a reward.
2
@Bk2, the most common way to get wealth in the US is to inherit it. Just be useful enough to be born.
1
@E, so does a lifetime of labor.
2
If folks are going to be truly honest... no one really makes it on their own. Without public education, infrastructure, so many things/supports that taxes pay for... where would any entrepreneur be?
Yet when it comes to paying folks fair share... they forget what the US government has done for them at every turn in the road (literally).
Nobody gets to decide how their taxes are going to be spent.
But taking the position that "this is all my money" is blind to the costs of all of the pillars of our society. Repubs and Libertarians will cringe at my liberal thoughts, but that is just their self serving ideology IMHO. Yes... you should be able to make money... but how much is enough? Lastly, it is very apparent that the top 1% are doing VERY well. Yet they are pulling strings in Washington to lobby for more of the pie than they already have? Shame on the greed. Sanders and Warren are just pointing out an unsustainable imbalance of wealth in our country. It's about time somebody tried to speak up for the little guys!
4
@Billy so you and the Commisar should decide how much is enough? $1m for putting capital at risk and creating jobs? Or is that too high for those who want only class warfare? What should anyone be able to keep? You tell me or anyone. I don’t want anyone else’s hard earned money. Sorry. What I’d like to see are the Sanders acolytes have to earn taking their money from their neighbors. So walk house to house in your town and everyone who has a good job or started a business has to hand you $20 each week. Truly what is the difference in any of these proposals? They have it. You don’t. Life’s is unfair. What’s theirs is yours or everyone’s.
2
@Billy
"Yet when it comes to paying folks fair share... they forget what the US government has done for them at every turn in the road (literally)."
The US government that the entrepreneur has been paying for his/her entire life (literally)
So, some very high portion of American children live in poverty (50%? 20%?) Is this the "special interest group" for whom Dimon's precious 2% over $50 million would be "wasted"? Get real, develop some moral grounding and stop thinking your sole value is based on extreme wealth.
2
The bottom line is that Warren and Sanders want and are working for a socialist type of government that is big, oppressive, meddling and they want the rich and higher-income individuals to pay for their fantasy. They want control of the government and they want money to control the people.
5
Your understanding of Warren, Sanders, socialism and economics appears severely limited.
1
They’ve got to be kidding, right? They are so wedded to the status quo they are blind to the current bad effects as well as the incredible stimulus it would be to move money into the government (debt) and those who need it. It’s time to get out from under the greediest and put fairness back in play.
1
This is truly an idotic article. No one believes this nonsense anymore and that is why a wealth tax is wildly popular. This boogyman of no economic growth is no more scary than what people are suffering right now. So if the wealthy threaten to shrink the economy if they can't have all the toys, then let it shrink. Who cares, its already very very small for the average person. All this so called growth is not going to most people. Its better to have a smaller economy well distributed than this monstrocity of injustice we live under today.
2
Economic growth for whom? The 1%??
3
Depending on how the additional tax revenue were spent, it seems to me it could very well jump start the economy. If young people were able to fund their higher education by only borrowing the $5-7K per year the federal government guarantees, then they would have both "skin in the game" and manageable student loan payments. This, is turn, would lead to an uptick in the housing market as more people in their twenties and early thirties would be able to purchase homes instead of perpetually renting or living with their parents. Likewise, if some of the lost manufacturing sector jobs were replaced with good paying jobs building infrastructure, those employees would again have strong purchasing power to fuel the economy. Most middle and lower class Americans have a list of ways to spend money whether its a new roof, a remodeled bathroom, a child's college tuition, or a trip to the Grand Canyon. Some of Ms. Warren's proposals seem extreme to me, but I have long felt income should be measured as simply income, regardless of its source, and some scions of business might be pleasantly surprised to see how effective their tax dollars are at actually powering the economy.
3
Individual wealth in the ultra rich has never been demonstrated to be a reliable source of job creation. If it were and supply side economics truly did work then we should have more well paying jobs than we have now and the middle class would be stronger. On the contrary, the middle class continues to dwindle and the rich grow ever more rich (and powerful thanks to the Citizen's United ruling).
We must remember that the top tax bracket at one point was 90% and that adjusted for inflation that 90% would still kick in at a relatively low income in today's world. I do not believe either candidate is pushing for a return to the Eisenhower tax structure but a tax on the excessive accumulated wealth of certain families and individuals. However, when there is more collected from the top as before, there is money for projects that benefit us all, better schools, better roads, improved infrastructure, and more money for defense. The middle class was strongest during the 50's to the 70's, before the Reagan "tax reform," the W "tax cut," and this most recent Trump tax giveaway.
I am not sure if either the Warren or the Sanders plans are the perfect answer but at the very least it should spark nation wide discussions on the extreme wealth in so few hands.
3
Democrats need to tax something new to promote and protect their social programs. If they just heavily tax earnings and savings of rich taxpayers who have family incomes of more than $150,000 a year and a net worth of more than $150,000, there should be plenty of money to accomplish all of the goals of Democrats.
Interesting that the article refers to "an enormous transfer of money from the wealthy to ordinary people". Seems to me that the reason these people have so much concentrated wealth is that over the past 30 years there's been an enormous transfer of money from ordinary people to the wealthy. I think of this as restoring a little balance. We shouldn't vilify the rich or poor, but it seems clear that many of these companies have chosen not to pay their employees a living wage and the government has been forced to step in and make up the difference. I don't think 2 cents on the dollar over 50MM is going to discourage someone like Jeff Bezos.
7
Taxing wealth makes sense. The government protects it's citizens property and wealth. Just as a private security company charges more to guard a bigger mansion than a smaller mansion, the govt should tax based on the size of wealth.
Am not sure if 2 percent is the right rate. Also the tax should start at a lower threshold of wealth, $1 million , at a tax rate of , say, 0.5 percent.
The govt provides services and it should charge accordingly.
Finally on my part, the people own all the land jointly with the govt as trustee. Individual landowners merely rent land from all the people and the govt must ensure that appropriate rent is collected from all renters of the land.
2
Returning to the progressive tax model of the 1950s did not hurt growth then likely not to now.
3
That's fascinating. With Bernie's tax plan in the 80s, the wealthiest people in America would only have 20% of what they actually have now?
I don't know about you guys, but I'm not sure what is the point of having $1 billion instead of $5 billion. What could you, as an individual, possibly do with that extra $4 billion that you already couldn't do with $1 billion?
6
You could buy more houses and boats, man. That would begin the trickle down process that has made our country as excellent and functional as it is today.
1
That’s not you to decide!!!!
What can you do with free speech or press that you can't do with a govt-controlled media? why do you need the right to assemble freely when you can go to a massive central party rally complete with choreographed goose-stepping and tanks? your mentality and the premise of your questions sounds downright un-American and inconsistent with capitalism, but fortunately there's a major rally and celebration going on over in Beijing today where all the attendees seem perfectly happy and are cheering their lungs out, and the state takes care of everything so nobody has to worry, so it all must be good, right?
1
It cannot be denied that a great deal of the disparity in wealth between the top 1% and the rest is concentrated in stocks owned by the wealthy. Through the years, this disparity has unfortunately increased. It also cannot be denied that the increase in stock market capitalization can greatly be attributed to not only low interest rates by the Federal Reserve (Government). But in addition, I would also argue a factor in the increase in stock market capitalization wealth would be the huge federal stimulus cause by national government debt which has increased to over $23 trillion (Government) to date. As such, if government policy as opposed to individual risk is a huge factor in the increase in stock market wealth, it appears only reasonable that a wealth tax partly attributed to stock market wealth is only fair. As the saying goes, "Give to Caesar what is Caesars..."
2
Question is, if the benefits of economic growth accrue nearly only to the wealthy, is it a bad thing if some benefits are diverted to everyone else at the cost of marginal economic growth? Secondly, economic orthodoxy states money in less wealthy the hands is more likely to get spent, meaning higher economic growth, not lower economic growth. So oligarchs might not buy their 10th home and 4th yacht, but in exchange everyone else gets a chance to put food on the table, a roof over their heads and not lose both at the same time because they can't work and pay bills because they broke their leg.
That's how the real world works.
13
"But the idea of redistributing wealth by targeting billionaires is stirring fierce debates at the highest ranks of academia and business, with opponents arguing it would ... sap the motivation of entrepreneurs who aspire to be multimillionaires".
How about the motivation being sapped from all the creative, hard working, innovative people whose every day hard work never gets rewarded? I'm talking about the people who are actually doing the innovating and doing the work, the ones who are being robbed daily so that the ultra greedy can get richer and richer. When do the people actually doing the work get to enjoy some of the fruits of their labor? We should be more worried about sapping their motivation rather than a select few billionaires who already have it all. Yeah, let's have an honest discussion about having one's motivation sapped.
The U.S. economy desperately needs to be reshaped.
18
If you want that money go out and work for it! Just like the people who have it did!!
1
Interesting that some professional sports leagues have a "luxury" tax to level the playing field so to speak but it's verboten in the real American economy. The team owners are all capitalists I believe and the leagues seem to be doing fine.
6
Impeding growth is a pretty good idea. It's a large part of what is leading to environmental degradation: new car every three years, latest upgrades to your kitchen let alone a new house; more and more clothes; newest version of iphones; alexas, etc etc. We don't need this growth. We need imaginitive alternatives to the endless growth capitalism we are drowning in.
7
A wealth tax on incredibly rich individuals and families is both fair and sound economically. You can travel to many other countries where the gap between rich and poor is more equitable (Sweden/Japan) and note that their economies have not suffered, but benefited the masses. The tax code should also be written to be more equitable and not allow the rich to circumvent paying their fair share. I do not think we should be spending the money on free college for all, but rather give more grants to the poor & working class, put a cap on what loans should be repaid at (say 2-3%). Make it easier & more affordable to get a education and invest in early childhood education/development so parents can afford child care and still work. Invest the money in green jobs in former coal states and in areas where the economy has remained stagnant to allow workers to continue to work and continue to pay taxes and spur economic development in their neighborhoods. Lastly, it bothers me that no candidate is saying all government workers, including the House, Senate, White House should have to be on public health care and 401ks like most workers....if they would make Congress get the same healthcare as the poor or middle class you would see them fix it in no time! That would be a winning ticket for the country and one for any presidential candidate. I hope one of their campaigns read this too. We need fair representation and taxation.
4
"If Warren’s wealth tax had been implemented in 1982, the net worth of the 15 richest Americans today would be cut in half — to a measly $434 billion. Under Sanders’ wealth tax proposal, these 15 individuals would see their fortunes cut down to one-fifth of their current net worth. That would make Jeff Bezos, the richest person in America, worth a paltry $21.56 billion.
This. Is. Not. Radical.
What’s radical is that the richest 0.1% controls an entire fifth of the United States’ wealth. What’s radical is that income inequality is at its highest peak in 50 years. What’s radical is that the Waltons, the family behind Walmart and the richest family in America, make more in one minute than the median American family makes in an entire year. We desperately need a wealth tax to rein in this out-of-control inequality."
From Robert Reich
9
Stop economic growth? Pay in many fields is at 1985 levels while costs have quadrupled and more. Benefits are largely gone and lives on the edge. The "growth" went to the rich, tax cuts to the rich, owning more of all there is every day. How about starting a little growth for the rest of us? Or at least stop crushing us a bit. That's what I'd like to see. And only the democrats have the least interest in that.
7
I am sure she could fine tune this proposal, what the middle and working class want is to somewhat level the playing field. They want to be free from the anxiety of massive wallet busting medical bills; they want to be free of the anxiety of having to purchase four new tires for their 11 year old SUV. All they want it the opportunity to move up in world and enjoy a decent life with their families.
I am sure they wonder why the super rich get time and time again from the Republican party massive tax breaks when all they get is almost nothing in return. Here is a perfect example right now most middle class and some working class citizens pay tax on their Social Security benefits, why they ask is this so? It is my question also, why not eliminate the tax all together or tax it at the same rate as dividends or capital gains? Ask the Trumpers why this is so, when asked this question they cannot answer, my guess is that they DO NOT even know or understand why the vaunted tax cut did nothing for them!
3
@General Noregia, it was so until recently that social security was untaxed. Then Republicans saw a chance to cut hard by taxing most of it as regular income. What a loss, and done so quietly that people never rebelled. But they want more, the republicans--they want to slash us more, even as the first generation without pensions is trying to retire--not just for themselves, but for the young, who need the jobs.
1
"...would undermine business confidence, reduce investment, degrade economic efficiency and punish success..."
This is the same shallow, defensive argument they animatedly proselytize every time a tax increase is discussed.
Investors would refuse to invest if their investment only netted a billion dollars instead of two?
I think Warren/Sanders should go even farther and suggest legislating massive penalties on those companies who threaten to 'leave the country' if their taxes are increased.
To date, there is nothing more than vague, anecdotal evidence that Reagan's trickle-down 'Voodoo Economics' has ever worked or ever would.
3
In order to do this, every American will have to tell the government, every year, the value of everything they own. Otherwise, how would the government know who the tax applies to? That is a power the government has never had before, and an obligation that the citizens have never had before. This is a huge expansion of government power in itself. But, as we’ve all learned, we don’t need to worry about the government, or the presidents who lead it, abusing its power.
5
Finally, someone who has a sense of reality and is not living in a fantasy.
3
I find it interesting that people are screaming about a wealth tax while they are as poor as the rest of us peons. When you look at the Income Taxes charged after the 1929 crash millionaires were paying about 90% taxes which was lowered after WWII to about 70% and it didn't seem to deter the wealthy from investing and making money. Time that everyone paid their "fair share" what ever the citizens determine a "fair share" is. We all are responsible to pay our fair share to support our government and make sure that the least fortunate have at least a fair shake in this the worlds richest country.
2
Wealth does not trickle down, tax cuts do not pay for themselves, and tax cuts do not create jobs. Tax the rich, raise the minimum wage, overturn Citizens United.
Warren is right.
6
I make a decent amount of money—not a fortune, but more than many and more than I need—and it’s no where near the numbers here. If you took away 2% I would barely notice. But it could make a real difference in the health of the middle class. Tax away!
6
Economic Growth comes from Consumers with money in their pockets, not Millionaires and Billionaires.
6
I live in Geneva, Switzerland which has a reputation for tax avoidance but is actually a fairly high-tax location for individuals.
For one thing, we have a wealth tax in Geneva that aggregates worldwide holdings of wealth (not just stocks, bonds, and corporate ownership, but also houses and such). The wealth tax is assessed in lieu of a capital gains tax - you simply pay a small percentage (1%) on all types of wealth every year, rather than paying a larger percentage (20%) on the increased value of your wealth.
So - the wealth tax is approximately the same thing as a capital gains tax (after paying it for a sufficient number of years) except for two things:
1) it is a bureaucratic nightmare, in that my accountant and the government accountant (for Geneva) have to go through all of my holdings of stocks, bonds, houses, watches every year for every where in the world - what a lot of work. At least with capital gains, the reporting is limited to banks who then keep accounts and submit.
2) it is virtually impossible to enforce, because wealth is so easy to move across lines and reporting is limited. At least banks tend to be more multinational and laws can make them report (or, are doing so now), but it is difficult to monitor every swiss watch or condo investment (since there is no official reporting on such).
So a wealth tax is not that hard on the economy - but for reasons of expediency give me the capital gains tax any day - it should just be a lot higher in the US.
6
@Hcase Erving
Wow that’s some 1% problem if I ever heard it.
4
A wealth tax is appealing to the far left, but it is problematic on many fronts. A virtually equivalent revenue yield (within reason, without confiscatory rates) can be achieves with a loophole-free and progressive Alternative Minimum Tax. My new book, Enlightened Public Finance, explains both concepts in detail, and was written to inform these kinds of discourse.
3
I keep hearing these "ideas" coming from the left, but no real way to implement them.
It has to pass Congress. I don't envision that happening.
I envision more fighting and nothing getting done in Congress...again.
And, why should only a select few benefit from these new taxes and not the entire population?
This is just the newest version of identity politics.
6
@Randy L. Your comment is gaslighting, pure and simple. Stop trying to confuse people. The policy at question is the opposite of identity-politics: an issue of economics that is race and gender blind. Readers, beware when somebody claims that up is down!
5
@Randy L., what do you mean "a select few"? Do you know how many people are struggling with medical debts? Do you know how many are in college, or owe for it--and do you really have no stake in enough doctors and nurses in your future? If you think even a little and learn just a bit, you'll know that if government is for the people, it's democratic.
1
Sap economic growth? Really?
I believe instituting a (legal) wealth tax on the top 1% while reducing taxes on those making less than $100K would more stimulate our economy. People who make less than $100K would use most of the money to better their lives now and may even save some for later.
We must address the income inequality in our nation. The correct wealth tax would be a good start.
24
Nobody should be penalized for making money- it's especially absurd in the guise of people working hard at value added activities. Literally someone could bankrupt themselves by leveraging credit for excess and owe less than a hard worker who consumes far less. That's a hard measure of stupidity. The fair way to obtain revenue would be a consumption tax- similar to Canada's GAT. But the thought of taxing consumption doesn't garner votes for progressives who only want wealthy people to be taxed. Socially rectifying taxes only rakes butcher knifes across the national fabric.
9
But, of course, Warren's and Sanders' wealth will not be damaged by these Robin Hoodesque schemes. I am by no means rich but I live comfortably. Those of us who are able to live comfortably will eventually be the targets of these Marxist-Socialist-Leninists. America was, is, and will be the land of opportunity; that is why millions and millions of people have flocked to this nation since its founding. When Thomas wrote that "all men are created equal" that is what he meant; all men are created equal to pursue opportunities for a better life. Sanders, Warren, and the other radicals vying for the Democratic presidential candidacy see something wrong with that; they want to make America the land of equal outcomes. Obama tried to do that but failed. I am against the nation becoming the land of equal outcomes and I will vote for Donald J. Trump to serve another four years as the President of the United States of America. And if he is unfairly removed from the White House, if the nation survives the Civil War which will indeed follow, then I will vote for the man, and I mean man, who will restore America back to the land of equal opportunity. Thank you.
16
@Southern Boy Nice to see the casual reference to violence in your post.
I'm really worried we'll see acts of domestic terrorism if Trump is "unfairly" removed from office.
14
I live comfortably, too, and have more money now than I ever imagined having. But my sons don’t. My generation was the last to be able to make more money than our parents, the last to benefit from affordable college, affordable rent and housing prices, the last to have very good employer-sponsored health insurance. Even the cost of vehicles was affordable; we had 3-year car loans. Now, not even 60-month loans are affordable; some extend to 72 months. If taxing the extremely wealthy helps restore the American middle-and lower- middle class, and give people living in poverty a chance to improve their lives, I’m all for it. Obama was right when he said “You didn’t build it,” referring to the help from ordinary Americans in building corporations and personal wealth.
7
@Southern Boy It's amazing to see wannabe rich defending the actual rich, who would happily crush him underfoot for another stock option.
4
There's a big difference between "shrinking" the wealth of the one percent and reducing it so that with proportionately corrective taxes the distribution of wealth is more equitable and humane.
Just another example of how the media influences what the public thinks about how things work. You can tell the point of view without reading between the lines, since reporting now has entirely "fair" and "'balanced" representation. I can't watch a major cable panel anymore because I can barely tolerate the persistently skewed perspective of former Senator Santorum. I have to put up with it if I want to see what anybody else has to say. Just equal time, folks! And let's not shrink the wealth of those who've worked so hard to earn it!
What good is economic growth if it all goes to the top 0.1%? It’s time the rest of us get a fair shake.
2
Economic growth and innovation have to stagnate if 20 per cent of wealth is controlled by a handful of individuals, who then use these funds largely to perpetuate their positions. and not to address the greatest most urgent needs. Some of the wealth of today's billionaires is a result of earnings from computer innovation, but these areas may now be overinvested and over competitive while other areas where technical expertise could do wonders are under capitalized and not adequately explored. Other billionaire fortunes are built on control of "essential" products such as fuels, but perpetuate the use of such products while safer, less destructive, possibly more efficient energy sources are not adequately developed. In recent years, developers of investment models have become billionaires,although their business strategies were sometimes speculative and predatory, paying off the "investment bankers" upon consummation of the deal, while leaving later investors holding the bag when the schemes economically failed. Taxing a few uber rich at a rate of two cents on the dollar will not materially discourage budding entrepreuneurs or innovators, but will liberate trillions of dollars for government use to meet urgent needs, reduce public debt and taxes for the general public, and thereby stimulate economic growth and innovation where most needed.
2
We can’t even pay for what we spend now. Fine if you want to tax the wealthy a little more, but new spending programs isn’t the answer.
3
The problem with conservative objections to the wealth tax is that they have redefined many political and economic terms. "Growth," for example, specifically means increased stock value and increased wealth for investors, usually at the expense of reduced wealth for everyone else.
By that definition, the wealth tax-- to which they'll soon give their own suitably horrifying name-- will indeed have a very damaging effect on "growth." But it will greatly benefit the economy to which 99.9% of us belong. The persons (individual and corporate) subject to the wealth tax use that "capital" for transactions that increase the owner's wealth, or simply hoard it, rather than investing it in things that create jobs or benefit the overall economy. It's the same way they used the windfall from Trump's tax cut to buy back stock and enrich themselves and their investors, rather than trickling any of it down.
Non-conservative economists hasten to point out that actual growth in the overall economy was highest when the wealthiest were subject to a confiscatory marginal income tax rate (at least in theory). The Reagan Revolution reversed that trend, with tax cuts for the wealthy that redistributed the nation's wealth into the wealthiest pockets, creating the ever-increasing inequality from which we now suffer. The wealth tax would correct that unsustainable inequality by liberating that hoarded money, and putting it in the hands of the people who produce actual growth in the real economy.
7
Economic growth comes from economic activities. When wealth is concentrated in a certain part of the population, activities are no longer directed at economic ones, rather at political, working as means of tilting the playing field. When the playing field is tilt, efficiencies decline and growth is thwarted. Another rebuttal is the assumption that growth resides only in the domain of those who are wealthy. Wealthy people tent to be less creative, hence unlikely to be the creator of growth. Economists need to learn that there is no ceteris paribus in the real world: political activities are employed as much as economic ones.
2
"whose $1.5 trillion tax cut largely benefited rich Americans and corporations while leaving future generations with the bill."
NY Times, you really need to think about the implications of this sentence. Republicans have been cutting taxes for almost 40 years, eventually that bill is going to come due. Economists like Gregory Mankiw and Larry Summers can talk about how raising taxes is bad until they're blue in the face, but how else do they plan on paying back all of the money this country has been borrowing?
And speaking of Mankiw, his latest piece a few days ago is a perfect example of why we need to raise taxes on the wealthy, not reduce taxes. When tax cuts are proposed, it's always under the guise of increasing spending and putting money back into the economy. But read his piece - he says we need to create a tax system that punishes spenders and benefits savers. Which is the exact opposite of every republican talking point ever. We need to face the reality that the wealthy really just want to have more money and power and will say whatever they have to so they can make that happen.
As Warren Buffet said a few years ago in the NY Times, there's a class war going on and the wealthy are winning.
4
Who is all this growth FOR? There are tens of millions who are totally left behind (even after years of hyper growth) while the top 20 million drive up prices in coastal cities, competing with each other for the growing pie. What's the point of this?
6
Concentration of wealth is the natural endpoint of a free market. Some people are more skillful, motivated, and lucky than others. Success begets success until a few people own everything that matters, like the Monopoly game that was invented to demonstrate this reality.
Western society prevented this from happening by expanding to and exploiting the rest of the world, so that there was always new wealth to replace what was sequestered in the hands of the uber wealthy. WW2 shook the boat, forcing Europe itself to restructure and realign. In North America, until recently, there was the Western frontier.
That's finished. All the important properties on the Monopoly board are bought, and the smaller players are falling by the wayside. To use a metaphor from nature, when the wolves no longer need to hunt, they take to herding.
That's the future, unless we either design something different or endure a cataclysm which effectively overturns the existing order and starts the process over again. Karl Marx and Communism were an early attempt that didn't go well, but one wing of it has morphed into social democracy, which is the current contender for the best countervailing force.
At some point, you have to either let them have it all, or take some of it away from them. It might not be fair, but that is the choice our descendants will face, presuming that the Earth is still habitable.
6
What about the economic benefits of free college education, college debt relief, universal healthcare and childcare? Won’t those drive growth as our population is better educated, freer to innovate when not chained to college debt, freer to start a company without high healthcare costs, and allow for better access to the job market? Moreover, it will create a happier and fairer society.
p.s.: Larry Summers is not a left-leaning economist.
7
In regards to the effect on growth: What does the data say? When you have competing theories, the way to discriminate the truth is to turn towards experiment or observation. Has a wealth tax been tried elsewhere? What were the results?
Regardless of those results, it may be worth a small handicap on growth for the sake of things like political stability, government revenue (remember the budget deficit?) and reducing inequality (arguably a goal in its own right).
3
Hunh. So the wealthiest individuals and corporations, and the economists who serve their interests, think that any move back toward a more progressive tax system (like the one we had during the decades of America's greatest prosperity) would lead to economic disaster. Who ever could have predicted such a position?
6
The plans Sanders and Warren are proposing should be judged on the outcome that will be achieved by their plans, not by the feel good messages that accompany the plans. Wealth taxes failed miserably in Europe and have been almost completely eliminated. Progressives point to Europe as the model we should be following yet they don’t take into consideration the experience Europe has with this tax. It didn’t succeed there and it will be counterproductive here as well.
7
John, I would add, how many countries in Europe have let their population explode to 33 million hungry souls.
We will soon be like overpopulated Asian or African countries.
We need a better alternative to Warren’s plans.
I feel this country should have invested in its youth when it had the chance. It didn’t. It filled schools with social studies & liberal arts, sports and ideology. Now we have a large portion of the population with little grasps of basic economic principles such as compound interest.
You have 2 snake oil salesmen right here and people don’t realize the way they describe wouldn’t work. Let me try to put it in a way that most people can understand why.
Here is a pizza pie. I tell you you can eat half of the remaining pie every day. First day you ate 1/2 the piece. Second day 1/4 because that’s half the remaining pie. Third day is 1/8.
Social programs are like your belly. It needs constant funds year over year to operate. If your pie is getting smaller, you need more pies to cut. Warren and Sanders’ $50 and $32 million asset limit is just the initial limit. In a few years as social programs need more funds and the pie smaller, the limit will be lowered. Eventually the limit will be low enough it will just be a tax like real estate tax excepts it’s everything you own.
Of course Warren and Sanders’ would say assets increase faster than their tax (no way faster than Sanders’ 8%) so it will all reach an equilibrium. But they also assumed the wealthy wouldn’t simply move assets oversea. It wouldn’t work in the real world because there is no incentive to not move asset overseas.
5
Amateur Historian, sounds correct and yup, I’ll definitely eat the pepperoni from the top.
1
I can't find the income I got from the wealth created by my house and land price increasing.
Wealth was built before Reagan by paying workers to build capital like houses, factories, utilities.
Since Reagan, wealth is created by firing workers, creating scarcity of capital, houses, factories, utility services, to allow jacking up prices while cutting labor costs, and inflating the prices of what were pieces of paper back then, stock share and bonds, but are bits in computers today.
Taxing inflated prices on bits in the computers recording ownership in Google, Sears, Amazon, Ubrr, Pets.com will simply slash the prices over all, with a large number going the way of Pets.com, Sears, and it looks like Uber, to pennies, with Bezos, Gates, et al getting "poorer" without owning any less of the companies they founded.
I have seen my house price go up and down several times in 32 years, which supposedly means I got lots of income from wealth, then lost lots of. money in wealth destruction, but the value of my house, a place of shelter, has not changed in those 32 years.
Price inflation of assets does not create wealth and income, no matter how much free lunch economists keep saying price defines value, and value and price is not the cost of building an asset, but the price extracted by preventing new substitute assets from being built.
Taxing "wealth" will simply lower prices of assets but not change ownership.
3
Actually, the growth of disparity in wealth affects where in society the innovation and related rewards occur. As wealth has become more concentrated at the top, so has the innovation and its rewards. This is not surprising, for insofar as innovation requires capital, it will become concentrated in the hands of those who have the wealth to do it. By the same token, it will move from individuals to established corporations. Apple innovates; Steve Jobs is history.
2
Taxing poverty works for rich folks.
10
Trickle down doesn’t work.
12
That’s why Andrew Yang is proposing a “trickle up” economy with universal basic income.
1
Ms Warren is on to something. Bernie sure isn’t.
4
I don't know about the economy, and most likely nobody knows at this point, but it will definitely change politics, much less money to buy politicians at all level of our government and to finance right-wing media.
7
Just a question: Will one be taxed on their net worth above 50 million so let's say you are worth 60 million, would you be taxed on the 10 million above the 60 or would you be taxed on the total net worth of 60 million? I know in NYS if your estate is worth over X you will be taxed on the entire estate not just the amount over X. thanks,
History shows that Bernie's floor of $32 million will decrease with time, just like the top tax rate has gone from 7% at creation to 37% now. Norway's wealth tax starts at approximately $165,000 for an individual and Switzerland's tax starts at $102,000. I will be interested in seeing how much staying power this "tax the rich because they are not me" mania has when it become "tax me."
4
"Be afraid! Economists are afraid for the economy!"
Articles like this are why I believed Chomsky when he implicated the "mainstream media" in the manufacturing of consent for our undemocratic plutocracy. Give us all a break. Giving billionaires a haircut by raising their taxes is way better than some of the other alternatives. Unless we can find a way to overturn Citizens United, it is imperative that the rich pay their fair share of taxes. Increasing inequality undeniably strengthens the anti-democratic planks of the Republicans' platform. Just look at all the huge tax breaks given to real estate developers in that 2017 tax cut, signed into law by a real estate developer, who refused to divest while in office.
7
@enzibzianna
Venezuela took Chomsky's advice and showered a lot of love on him. Cuba, the same. Look where it has led those countries to. If Chomskey is the barometer of opinions, then it is prudent to do exactly opposite to his suggestions.
What is fascinating about this article is not what is in it, but what is not. There is no mention of the Constitutional implications of a wealth tax. Hint: this might be important.
3
@Tourbillon
I agree that the article does not address the fact that the Constitution does not allow for a wealth tax.
It is very important that such a tax is unconstitutional and would be shot down by the courts.
“Taxing capital is not a good thing for creating economic growth, and if anything we should be looking at how we create more incentives for economic growth.” Steve Mnuchin.
It seems to me that proving tuition-free college to every American would be far more economically stimulating that allowing incomprehensible vast sums of $$$ to be held by a relative handful of people.
7
Weave, suffer the poor kid who wants to be an electrician, a plumber or mechanic whose parents are paying for someone else’s kid to major in social work or psychology in college.
@Weave
If those tuition free degrees are in gender studies and myriad social justice majors, then it will be an exceptionally bad idea to support free college, and instead of creating an economic stimulus, it will create an ever-growing capital sink.
How many times have we heard from politicans, We will tax the wealthy. It just never happens. Even here in Canada, the same old story. The poor pay taxes, the rich laugh all the way off shore.
6
2019 is the first year since Fortune keeps track of global companies that China replaced the US with the most companies on Fortune Global 500. East Asia + Singapore accounts for more than 40% of the biggest companies in the world.
The US have long lost the title of the most innovative and entrepreneurial country and here we have candidates openly talking about how to redistribute wealth from the bourgeoisie to the proletariat. It is not just tax on income; it is tax on asset, on inheritance, on heirloom. Your grandma gave you this pair of earrings she kept when she left the old country? Now it belongs to the people.
2%, 3%, 8% sounds innocuous. That’s per year. If at 30 your mother gave you her house (assuming no gift tax), by the time you are 80 the government would own half of it. If you die, the government would take another quarter as estate tax. You’d giving your child(ren) a quarter what your mother gave you.
3
Those with fortunes exceeding $50 million are certainly not ‘the bourgeoisie.’
@AmateurHistorian some people's grandmothers don't leave them anything.....
Unions were the tools of the established middle class and of the workers aspiring to join the unions which would give them the ladder up to the middle class.
2
She is my favorite in principle (i.e. I like her ideas in general) but she is so overreaching to the Left that she will never win. Only 30% of voters are registered Dems and only half of those call themselves liberal. This means that she is appealing to the 15% of the activists, but she does not stand a chance in the general, even against such a disreputable person in the WH now.
In a polarized country that is center-right, the Left never wins. It is so sad.
1
The economistss have their models for growth and their widely accepted view is that we must have x% growth. The ecosystems that support us have no knowledge of these models, they just suffer the results of the continuously expanding human population, economy and attendant wastes
1
Modern wealth inequality exists because a small number of human beings have been able to leverage their intellect and ambition to create goods and services that society has made very lucrative. One hundred and twenty five years ago, blacksmiths who made horse shoes found themselves similarly disadvantaged vs those who developed motor cars. Confiscating the wealth of the innovative, does not make the non-innovative smarter or more productive. Democrats who get excited by confiscatory taxation of people who have more, are no better than Trump supporters who promote his racism and populism.
2
@Richard
No one seeks to deny compensation for creativity and investment. However, there is no success without those who work to produce a product and market it. For Capitalism to be sustainable, profits needs to be shared in an equitable fashion. The Pendulum is reaching the top of the back swing. Workers need to reap their share of the reward. The inequality and Greed of Predatory Capitalism is not sustainable to a functioning society.
1
couldnt disagree more. most wealth in this country is generated by rent seeking, making money off of investments, monopolies, and controlling regulatory arms of government. show me someone who produced things without underpaying employees, buying off competitors. or getting favorable treatment from government, and i am more than willing to exempt their wealth
1
Remember when the estate tax had teeth and the rich fought like crazy to starve it? Why should the children of the rich get so much when they haven't done anything to earn it?
Remember when they said the same things about Roosevelt. He was going to destroy the country and he saved it.
Don't listen to these people. They are the rich and the servants of the rich. Making our country more equal is the only way to save it.
9
What evidence do Warren's skeptics actually have that her 2-cent plan will reduce innovation and investment, and de-incentivize productivity? I see none. Just a bunch of plutocrats and their apologists engaging in long-since-discredited economic voodoo. Show us some data.
7
Warren and Bernie's approaches are a good way to destroy the economy in the pursuit of wealth redistribution. It will backfire just like rent control and raising minimum wage.
Andrew Yang's UBI + VAT tax is a much better way of getting the gains of the 21st century economy to the people; you can have your cake and eat it too. See economist and Harvard professor Greg Mankiw's article in the Sunday NYT.
3
If the uber wealthy would pay their fair share by increasing pay and benefits to their employees, then this wouldn’t be a problem. Since every corporation wants to shrink it’s operating costs, the go-to solution that most of them use to achieve cost reductions is by decreasing either their workforce or how much they pay those workers. In addition, there wouldn’t be such a huge wealth gap and it would mitigate the need for so much charity, if workers were paid a living wage. Instead of being forced to pay steeper taxes in order to fund social safety nets, they could share their wealth with workers who could then have the power to purchase their needs in routine daily commerce. I’m no economist, but it seems to me that the only way to get to a more equitable society is for the wealthy to give a piece of the pie, either voluntarily or by being taxed.
7
It is a fact that large accumulated wealth has largely been untaxed, or received preferential tax treatment.
Contrast how passive investment income is treated relative to earned labor. Specious logic for the difference in tax treatment has furthered wealth inequality.
But wealth itself can escape taxation entirely through various creative trusts, while providing tax free liquidity.
Wealth inequality is at the most extreme levels since the Great Depression. It dangerously hollows out the middle class and lowers the propensity to consume.
Plans to tax wealth and carbon instead of relying increasingly on regressive payroll taxes will incrementally help save the planet and benefit the economic demand.
Concentrating wealth in the hands of a few is destabilizing and ultimately self-defeating.
The extremely wealthy will still be extremely wealthy after paying some taxes to support the nation on par with working families.
The endless pursuit of accumulating wealth is a pathological at some point, particularly when effective tax rates on the working classes are far more burdensome than those with far more.
8
It seems like we learned nothing from the supply side economics of the Reagan era. There was no trickle down and very little investment. Workers didn’t get paid more. All we got were billionaires. Economists don’t have to worry much about a wealth tax hurting something that doesn’t happen anyway. They’re talking about taxing individuals only and ones who just accumulate personal wealth that benefits only them. The billionaires won’t even notice while those truly in need will get some sorely needed relief.
7
It seems to me that the "hurt economic growth" and "discourage investment, innovation and startups" arguments are the same arguments we've been hearing for almost 40 years from those in favor of cutting income taxes and who believe in "trickle down economics". Perhaps in limited cases, on the margins, the wealthiest of people in this country will invest less money (because they get less return on their investments) but this must be weighed against the huge returns the country would get by investing increased tax revenue in education, health care, technological/environmental research, and paying down national debt (the costs of which likely outweigh the marginal benefits the country gets from investments by the very richest). IMO, the two biggest problems are (1) the potential unconstitutionality of taxing income after the fact and (2) the difficulties in measuring people's gross wealth and enforcing the tax. The reality is, the U.S. would probably need to audit the wealthiest Americans annually to make this type of tax feasible and applied correctly. The easier solution is probably making the tax code more progressive (including capital gains taxes) but that's a much harder sell politically.
3
Imagine how much capital would be freed up if Americans had no student debt, received a free college education, reasonably priced health care, and free universal daycare. The number of new entrepreneurs would be astonishing.
Furthermore, lower and middle income families will spend more on all sorts of consumer items: cars, furniture, clothing, food, computers. People would buy more quality food items, and they could afford to eat in nutritionally superior restaurants. Business would be booming as this pent- up demand is finally released.
True, Maserati sales might go down. Sotheby's might suffer as billionaires stop bidding on overpriced art. And let's not forget the high-end jewellers. But imagine what an improved lifestyle the "average American " would live.
22
The problem is that it’d be a vast accumulation of government power if enacted, and I don’t trust that with liz’s “golden key”, she will use it to open the right doors.
If she uses it to lower taxes for everyone else, that’s one thing. If she uses it for a vast expansion of government control, that’s quite another.
The last thing any Democrat even wants to consider is an individual keeping more of his or her money.
7
The true question is this:
Does a billionaire possess the better aptitude and ideas for investing his 100 Billion, or does the government? Evidence suggests that a billionaire will do the better job in growing economy and his money. That money handed over to current generation democrats and squad members will go in building and demolishing restrooms and inviting a billion more unskilled labor from around the world who will then clamor for further lowering of wealth tax threshold.
3
@Barbarika-Actually history has proven you assumption wrong. The New Deal was without a doubt a success and rescued the country from the brink of starvation. Many of the utilities and public amenities you use are born from these public work projects. Eisenhower’s government funded push for the federal highway system is utilized daily by tens of millions of Americans, and our country would be a very different place without it. The GI bill propelled higher education to the masses, and spurred the creation of a middle class. Private industry is currently flying on the coattails of decades of government money invested in air and space travel. All of these propelled our economy and the betterment of our citizens. Can you give me one example equal to any of these that a billionaire has done in America?
5
@Alex
I am all in favor of Roosevelt and Eisenhower's policies. Unfortunately, today's democrat leadership is a far cry from that. Today, in the squad run democrat party, that wealth tax revenue will go towards social justice wars and identity agendas of various sorts, destruction of energy infrastructure, unlimited and uncontrolled illegal immigration, and further augmentation of the paper pusher and enforcement empires.
Alex,
Actually the population of USA was about 132million for FDR, we now have 330 million people, half of whom pay no taxes.
Fix that problem first; you pay no taxes, even corporations, now that’s a problem.
Has Warren or Sanders explained that a Constitutional Amendment would be necessary to tax wealth.
This is just campaign propoganda, no chance of ever happening in the real world of American politics.
7
I’m used to living frugally. I don’t really have high expectations income-wise, as long as I can get by. So I don’t really care that a few people have gazillions. I guess in a way, it’s good for yacht-builders.
But what I do resent is that this gives gazillionaires an oversized voice in government, education, social policy. There is nothing that special about Betsy DeVos intellectually, for instance, that gives her so much power over the direction of public education. In other words the power to run it into the ground and replace it with Bible Study.
Also, be advised gazillionairism stymies the success of many small businesses. They just can’t compete with the big chains. It’s why every small town has a Walmart and a Home Depot or Lowes and not much else. Remember independently owned stationary stores, beauty and barber shops, appliance stores, fabric stores, hardware stores, optometrists, pharmacies, notions stores, etc.? (Does anybody even know what notions are anymore?)
Keep your piles of dough, but keep your hands off legislation that doesn’t benefit anyone but you. Whose big idea was Citizens United? Need we ask?
For every anecdote about someone like Elon Musk, I can give you a story about someone whose small business went under because they couldn’t get a foot-hold during the startup period or who couldn’t compete with the big-boy chains and an existing business went under. Unlike people such as Mr. Trump, many can never recover from business losses.
8
There are thousands of individuals who were denied credit for their ideas by big companies These ideas were deemed intellectual pretty owned by the companies and their senior officers. Bell Labs is just to one.
There wouldn’t be fewer innovations just more of the innovators being credited for their ideas
I used to hear people say: they wouldn’t do that; they are a big company
That's a lot of issues rolled up in one comment. Which one would get your vote?
Even, if by some miracle, the Democrats win back the Senate, which they most likely won't, there are numerous Red State Democrat senators who would never vote for a wealth tax. Also, If either Warren or Sanders do get the nomination, there will be many wealthy liberal Democrats secretly voting for Trump. In this country, money rules.
5
Just look at our stagnant economy right now. You can literally watch this theory being disproved in real time.
3
In October 2017 the Federal Reserve estimated that the entire US net worth to be 96.2 trillion dollars. It is estimated that the top 1% in the US control 38% of the countries net worth.
If you took 100% of the top 1%'s assets - 36.5 trillion dollars - you could not pay for all of the proposals put forth by Democrat Presidential candidates. What happens after all that money is spent and it's still not enough?
The amount that would be netted by liquidating all of the 1%'s assets would not even be close to 36.5 trillion dollars because who would have the cash to buy those assets since the 1% would now be reduced to poverty and no one would be rich enough to buy the assets.
3
As a graduate of Harvard, I always found Summers a truly deplorable economist and human being. His whole life has been spent schilling for the 1%.
10
If an entrepreneur or inventor creates a huge amount of value for society, they deserve rich rewards - billions if that's what it is. But, you can't take it with you, and ultimately, external rewards are meaningless.
Warren and Sanders ought to refrain from vilifying the ultra-wealthy, and instead extol the virtue of those who create wealth and then return it to society, either through philanthropy or by paying workers more.
87
@Ned since they don't do either particularly well i agree with Liz and Bernie that maybe we should twist their arms a bit more
71
@Ned Philanthropy as we know it in the US is a giant con. It's used primarily for three purposes: 1. To allow the very wealthy to throw Gatsby-esque tax deductible parties for themselves (Met Ball) 2. To build social capital and gain leverage (every philanthropist in the US) 3. To whitewash the reputations of the otherwise revolting (Koch brothers, Epstein). It has very little to do with true love of mankind.
Also, why should billionaires get to choose which charities are funded? Tax them properly, and we can fun countless social programs.
59
@Ned: I hope Warren knows the difference between creating wealth through doing something useful, and manipulating the system. I wonder if she doesn't say it because it would complicate her message. Politicians on the stump need simple, pithy statements. Equivocating and adding complexity destroys their marketability. She is close to the complexity threshold for such messages already.
I'll have to hunt up her online platform, where she will have more flexibility to discuss such complexities.
5
Economists have always made models and predicted events that never occurred. In 1937, they told President Roosevelt that the economy was sound and could stand on its own. So Roosevelt removed his federal programs. The result was a drop back into Depression. Now these all-knowing geniuses are telling us that a Wealth Tax will be detrimental to our economic growth.
It’s about time that the Wealthy of America started paying their share. Not only should we have a Wealth Tax but the Tax Rates should be changed so that the very wealthy pay a maximum of 50% of the Income. Also, after they’ve earned $15 million, they shouldn’t be allowed any deductions. It time that we stop pampering and coddling them and took care of those more in need.
People seem to forget, when the top Income Tax Rate was around 90% in the 1950’s we still had a very vibrant economy.
5
First, I would call Lawrence Summers "left leaning" given how he essentially favors deregulation at all costs. But this is a fallacy that has been disproven over, and over, and over again: "a country with more millionaires is a sign of economic vibrancy." Trickle down economics don't trickle down. A growing wage gap is a sign of an economy that is NOT vibrant or healthy. The health of our economy should not be viewed in absolute terms, but in comparative terms based upon the relative health of our citizens. In that sense, we are well behind most democracies.
5
The late, great Margaret Thatcher once said “ The problem with socialism is eventually you run out of other people’s obey”. Can anyone name me one country where this confiscatory idea has worked? Ask the French. They just tried it and it failed.
7
Poor little rich man, you are going to have to share some of your wealth... that wealth that you accumulated by under paying your workers, by not paying your fair share in taxes, or because you were born in the right family. Good.
9
Want to know who is re-shaping the world's economy?
Trump's tariff wars are for starters.
The world's economy is slowing in no small part to his attempts to show what a great negotiator he is.
I will stick with the progressives.
1
This piece is wanting. It's hard to see why the authors describe the conservative economists' concern that the wealth tax will alter the super rich's willingness to give to charity or spur a wave of divorces for tax purposes amounts to a "searing critique." These are tertiary concerns, at best. (This piece also says investment decisions will change but it gives no example.)
And then when the authors say that the liberal economists complain that its healthy to have more millionaires, it's as if the authors don't get that the Warren tax is not aimed at millionaires. She says its aimed at fortunes of $50 million and up. There are a whole lot of millionaires that this tax would never touch. And let's face it, $50 million is a massive amount of money. No one with $50 million who has to pay the Warren tax won't still be a millionaire many times over.
I get that there are real enforcement issues and legal issues as well, but this article tells us nothing about any real substantive objection to Warren's proposal.
5
Poor reporting. Why has progressive taxation worked so beautifully in Belgium, France, Germany, Sweden, Slovenia, Austria, Portugal, Italy, Japan, etc? Nearly all of the wealthiest, most innovative countries in the world have far higher taxes on multimillionaires and billionaires than the US.
7
Yes, these plans would reshape the US economy. They would reshape it to work for the benefit of the majority of the American people, and re-invest in our nation, and the health of our planet, for the first time in 40 years. It's long overdue.
11
Personally, I believe it is morally wrong to target the super wealthy with huge taxes. It is all about class envy and people wanting to get more and more free stuff from the wealth that others have generated. Aside from the moral issue, I also believe that huge taxes on the super wealthy will indeed hurt the economy. The super wealthy will either leave this country or stop working hard to grow their money if they are going to be so flagrantly robbed with huge taxes.
11
It's morally wrong for a few families to hoard the money supply and pass bit down generation to generation leaving scraps for the rest of us.
3
The exact opposite is true. If you put money into the hands of people who actually spend it, you will get more economic growth, not less. Most of the "capital" is tied up in the market which is basically a casino.
This is particularly true if the money is spent on things that improve overall productivity such as infrastructure and education. A 50% raise for teachers would mean they would spend more and we'd get better teachers to boot. Heavy investment in roads, bridges and public transit means more higher paid construction jobs as well as a more efficient transport system.
I was stuck on our drive back from Oregon through California this week. Coming back into Arizona was telling. The roads are awful compared to CA and everywhere you see in SB1 signs as CA rebuilds its roads due to the increase in gas taxes which the public supported.
I'd pay much more in gas taxes to get better roads but the ingrate Republicans (save on who may introduce an increase) believe taxes are the equivalent of the plague.
5
"Their plans envision an enormous transfer of money from the wealthy to ordinary people, with revenue from the wealth tax..."
Let's be clear - this is not about a "transfer". It's about paying back what they've basically stolen from the U.S. Treasury, schools, we taxpayers, the military, our environment and anything else that our taxes fund. Perhaps, finally, they'll pay their fair share of taxes rather than willfully avoiding them.
6
Reminder:
One billion is a thousand millions.
One million is a thousand thousand.
A billion is one thousand thousand thousands.
The median income in the US is reported as $60,000. This means half the income earners earn that much or less.
The difference between 60,000 and 30,000 dollars is 30,000.
The difference between 60,000 and 50,000,000 is 49,940,000.
49 million, 940 thousand:
49 thousand thousands plus 940 thousand
60,000 is 0.12% of 50 million, less than a penny per dollar, 12 pennies per hundred dollars.
30,000 dollars is 0.06 % of 50 million, less than a penny per dollar, or 6 pennies per hundred dollars.
60,000 is 0.006 % of a mere one billion, or six pennies per 1,000 dollars.
30,000 is 0.003 % of a mere one billion, 0r three pennies per thousand dollars.
A multi-billionaire with 10 billion dollars, 10,000,000,000.00, is 9 billion richer than the mere billionaire.
10 billion dollars is 9 billion, 950 million more than a billion.
60,000 dollars is 0.00060 % of 10 billion, way under a penny per dollar: 36 pennies per 60,000 dollars.
12% of 60,000, married filing jointly, is 7,200 dollars, leaving 52,000 after federal taxes.
37% of 150 million is 55 million, 500 thousand, leaving 94 million, 500 thousand after federal taxes,.
37% of a billion, 370 million, leaves a billionaire 630 million, or 630 thousand thousands.
The same rate leaves a ten-billionaire 6 billion, 300 million, or 6,000 millions + 300 thousand thousands.
Go figure.
2
The crying and complaining about the wealth tax (by the wealthy, of course) is silly. They have told us that if they get to keep all their money, then the economy is going to do well, and everyone will get a share. Sorry, hasn't happened, as far as helping working people. So, come on, lets try it. Most of the wealthy will find loopholes to make it look like they are poor. However, the bragging about their wealth and getting on the Forbes list will probably decrease.
5
It's NOT just the taxes that matter. What the financial elite are really worried about is that they would no longer be in control. They worry that control would revert to the will of the people through an honest representative democracy.
Political Power is what the real fight is about. The financial elite have it. The 99% don't. Ending corruption will put power in the hands of the 99% where it belongs.
7
Trump gave the wealthy 1.5 trilling tax cuts creating massive debt. I would imagine Trump is hiding his taxes where he paid 0 taxes and got millions in refunds.
3
Reshaping the economy is exactly what we need.
5
No moral compass, just a reverse grav from government to take your money and spoend it for you. I wonder why I'm bothering to save for retirement, as Elizabeth Wasrren would act to remove any benefit for me.
Let's watch them drive the whole government insolvent as they cannot get enough income to mnatch their fantasy of free retirement.
3
Right now I can think of 3 or 4 billionaires that have there own space programs, that is just totally crazy. A lot of the stuff AOC says about the Green New Deal is silly but taxing billionaires out of existence is not a bad idea the middle class is almost gone thanks to malls and chain-stores.
2
"Growth" has been misleading as it has come mostly at the top. Measure the growth based on Median Domestic Product and not Gross Domestic Product and get back to us. Let's us a kingdom analogy, let's say that the GDP of a kingdom grew 10% in the last year and went from $100 to $110. But all the of the $10 gain went to the King, did the economy really grow for most people?
1
Not going to happen. The very rich give up their US citizenship before they give up some of their money.
4
She has a plan for that.
Sorry, but this article's choice of "experts" is the equivalent of interviewing El Chapo and O.J. Simpson for "fair and balanced" opinions about criminal justice reform. And because it doesn't refer once to the French Economist Thomas Picketty's research on wealth inequality (probably the most definitive in modern history), it's like writing a story on arguments about the Theory of Relativity without mentioning Einstein.
3
Since when is Larry Summers a "left-leaning" economist? Having worked for Bill Clinton certainly doesn't make him one.
4
The bias in this article is shocking. There are only quotes from either obvious partisans (Mnuchin) or individuals who stand to lose money from the wealth tax.
Where are the quotes from mainstream economists? Has the author never heard of Thomas Piketty?
Piketty has shown - through evidence - that the unequal distribution of wealth worldwide is BAD for economic growth. A wealth tax would be GOOD for economic growth. The reason is that money, when redistributed lower in the food chain, would mostly be spent, thus stimulating the economy. Most people are desperate and only $400 or one paycheck away from economic disaster. As opposed to a billionaire who just sits on the cash (capital) and does nothing with it.
A wealth tax would help 99.9% of people in this country.
7
"...Have Raised Concerns from Some Economists and Business Leaders. The Rest of America is Beyond Excited to Have a Fair, Just, Successful Society."
Fixed your headline.
4
"Economic growth" is a function of demographics and productivity, and not a function of how rich the rich are allowed to be. Our ridiculous tax system has produced an unproductive allocation of income and wealth, allowing assets like money-burning Tech Unicorns to be 'worth' billions while our bridges collapse, women die in childbirth, and men drink themselves to death. Invest in life. Tax the rich, and end this 'robber baron' era once and for all.
1
I fear politicians a lot more than I fear Bill Gates or Warren Buffett. Politicians who justified their actions as motivated by concern for the common man (eg Mao; Stalin; Castro; Maduro etc) have murdered millions and millions of their own citizens over the last century.
1
Forget taxing the rich or free college or health care for all or $1000 a month...just explain how you intend to restore order and get us back to normal. Santa ain’t coming unless you first rebuild the chimney!
This is ridiculous. Jeff Bezos's life doesn't change much whether he has 50 or 100 billion but 50 billion goes a long way to helping normal people. Our current system makes it too easy to accumulate more wealth when you have wealth and too hard when you don't. And can we please return capital gains taxes to being considered as normal income? That is also a scam for the rich
5
I think similar arguments were given with the coal, iron oil and train "barons". Somehow we need to adjust our system to address this, taxing us not necessarily the way to do it.
Reaganomics (in all its trickle-down glory) and extreme capitalism have nearly destroyed the social and political fabric of the United States. Wealth tax now!!
2
The hand- wringing here about halving the fortunes of double digit billionaires reflects a distorted world view in which Lawrence Summers is quoted as a “”left leaning” economist. Where was the angst when successive trillion-dollar tax cuts created these fortunes?
1
Such a good plan.
Let's hold hands and watch the unicorns fly overhead.
Stay positive!
1
They don’t make Rembrandts anymore, how many times can you tax the same one over and over before no one wants one anymore?
2
Quotes from the likes of Mnuchin, Larry Summers, and Corporate America arguing against such a tax makes it seem all the more imperative to enact it.
3
Lawrence Summers is not a "left-leaning economist" by anyone's definition.
3
This is a straw man argument. If the richest families would have even 1/4 of what they have now, that would be enough incentive for anyone hoping to get rich. I also don't buy the charity argument. Most charities are a scam. let the government fund services directly without the middle man. This country has turned everyone into a beggar with their hands constantly out precisely because we don't fund social welfare sufficiently.
3
This reminds me of the story about the farmer who invited all his animals into the barn and said he was going to be generous and allow them to choose which sauce they wanted to be cooked in.
2
One of the more tautological headlines in the NYT. I thought the point was to reshape the economy. Who thinks it's hunky-dory as is? All the experts' fear of the wealth tax is just a repackaging of the trickle-down premise that rich people are job creators. No. Consumers are the only job creators. Redistribution will boost demand, and people with, oh, a paltry $1M will figure out how to meet it.
3
The Superwealthy may have to pay their fair share, and that HURTS our economy? The Republican Playbook is DESTROYING this country.
3
“Taxing capital is not a good thing for creating economic growth,....)”. Neither is taxing goods, as is being done with tariffs, Mr. Mnuchin.
1
So Jared Bernstein wants to tax
“financial transactions “?
Yes we do have real financial inequality that has worsened in the last 50 years but we need to look at what else has changed in the last 50 years:
#1is massive immigration of illiterate immigrants adding to the plight of economic woes as well as a massive exodus of decent jobs to Asia.
Respect Bernstein but is he suggesting that every time I use my ATM card I will donate to the poor?
Not buying it.
1
This is an additional tax on wealth, not income?
We would still pay income taxes. And please let me know if the numbers are quite right - because what it could easily devolve into is a tax on wealth of more than those with $50 million and would progressively attack such things as retirement savings.
After all, is it really fair that I was able to control my spending and make retirement savings a priority when there are so many who didn't and now really, really need financial help from the government?
I don't trust this idea at all.
3
I wish Bernie would just go away. He taints the messaging from better candidates and he splits those who might vote for a candidate who could beat trump. He contributed to the disastrous outcome of the last presidential election and now he is trying to drown Warren with a far more aggressive and punitive plan ( “ he does not believe billionaires should exist”) that just reinforces the fear mongering by the financial sectors.
@Mossy Give me a break. This is Bernie's platform before anyone else's. Hilary lost on her own and Bernie even campaigned for her. She was clearly a very disliked candidate who the DNC should not have run. As for Warren, she is Bernie lite. Do you really think she can beat Trump?
2
This kind of ancient “economic” group think is no more proven than the failed Republican justification of “trickle down” theory for cutting taxes. We’ve sapped our economy protecting—rewarding—industries as “too big to fail” as they reduce employment and wages, and buying votes and donations for tax cuts for the wealthy. What lies ahead is economic correction and repair of Republican damage.
Nearly all the benefits of economic growth since 1980 have gone to the .01%, so "sapping economic growth" is quite the canard. The American Dream of all boats floating higher was betrayed a generation ago, as all millennials know, by Reagan and "trickle-down" economic. Skepticism about fears of "sapped growth" for growth's sake are doubled since economic growth often comes at high environmental, social, and national security costs, like use of carbon fuels, "healthcare" as narcotic pain pills, and "defense" spending as torturing immigrant children, detention camps, and helping the Rich- the Saudis for example, keep their fortunes secure and enemies- Yemeni children included- at bay.
https://www.nytimes.com/interactive/2017/08/07/opinion/leonhardt-income-inequality.html
https://imgur.com/IaJtdBC
2
Warren and Sanders' proposals are nothing more than Welfare for Accountants!
1
Kinda got the idea from the sub-headline that I'd hear about real, research/analysis-based critiques of a wealth tax. Simply quoting a Trump lackey/oligarch (Mnuchin), a partisan-hack-economist (Mankiw), and one generally, but not entirely, reputable economist who doesn't do cutting edge research anymore (Summers) as they share their hunches, well, that's far from a refutation of the research based support in favor of a wealth tax from Saez and Zucman and others. And the oligarchs such as Dimon Bezos, the fact that they oppose a wealth tax tells us less than nothing about whether it would be a good policy.
1
As a commenter on the death of Robert Mugabe (the strongman leader of Zimbabwe) pointed out: while the economy got "wrecked" there, most of the profit from the national economy had gone to white landowners while leaving the blacks, the majority, poor. When Mugabe shifted ownership of the farms from the whites to the blacks, yes the economy suffered on the whole, but the black rank & file just went on as before.
In other words, nowhere to go but up! If we can shift the riches even a little bit from the few to the many, I'm very much in support. So what if the stock market suffers, it does not measure the well-being of most of us anyway. And if we can get some anxiety-producing needs lessened (how can I pay for healthcare?college? why must I work 3 jobs?), I say we go for it!
I cannot for the life of me understand why obscene wealth is tolerated while the rest of us just keep bailing our own individual sieve-boats, all alone, while the .01% "spits" on us.
2
this is the definition of concern trolling. totally dishonest and divorced from economic reality. it's been well understood for at least a century that wealth concentration is economically disastrous. Keynes called it the paradox of thrift, but it's simple to understand: when money pools in a few hands, the aggregate demand drops, because consumers have less to spend. investment dries up, as capital sees fewer opportunities for profit. redistribution is not simply a matter of justice. so the argument that redistribution slows growth is exactly backwards. anyone with a rudimentary understanding of economic principles should reject this sort of pro-business ideological nonsense.
3
@michael k. very well said.
Taxing the richest 10% who own 75% 0f the wealth is certainly not going to affect the economy .In fact the US economy did well when the taxes went up on wealth & corporations and inequality of income was reduced .
On this issue I recommend the reading of Thomas Picketty 's book Capital and ideology when it is translated in English
2
If Americans were starting to think instead of stealing from the rest of the world as they have always done ?
Invading the European markets without paying any taxes.
Consuming twice the energy of Europeans, emitting twice the carbon foot print, selling their pesticides and fertilizers all over the world who destroy the planet , denying global warming, etc..
That is a taxation on the rest of the world and on the ecology of the planet earth.
and exactly how do the evil rich - who create new technologies, new companies, new jobs and new ways of living - steal wealth from the virtuous poor ? … what is the mechanism ?... there isn't one... our country, and the vast majority of people in it, has gotten so much richer than the vast majority of the rest of the world by allowing people to get as rich as they want - not by stigmatizing wealth... Ms. Warren and Mr. Sanders: if you don't want to aspire to wealth, then don't, that's your prerogative... meanwhile, let the rest of us do what we want, thank you very much
1
Chasing after constant "growth" is killing the planet (and also killing individuals, indirectly). We need fairer distribution of what we have, and to try to keep the ship steady while reducing natural resources. Our STEM talent is wasted on "social media." How about immunizations for lyme disease (dogs have it)? How about an FDA that keeps us safe? How about nuclear energy that we can trust (because we ARE going to need it)? Anybody read about the plastic tea bags lately?
To quote Greta: "Fairytales of eternal economic growth"
3
I guess we should use the Republican plan to raise revenue for of two wars by paying for it by lowering taxes to stimulate the economy. Nobody seems to talk about how to pay for wars in Venezuela or Iran least of all the Tea Party. It's just in America's best interest to have a private army for gas companies and oil companies who pay no federal taxes to start regime change wars in Afghanistan or Iraq or Iran and Venezuela. LOL
1
@Richard Katz DO. Exactly, how the tax dollars are spent is every bit as important as how much is collected, there seems to be no problem spending trillions on other people’s wars but for healthcare or education there’s the cacophony of “ it’ll bankrupt us”, the people I should hope see this but without a draft they just don’t have enough skin in the game to revolt as many of my generation did in the sixties and seventies when we were told to go to a little place called Vietnam to protect our freedom from the big, bad Communists. Well guess what Vietnam is still a Communist as is China and they appear to be functioning quite well with incidentally a fraction of our defense budget, ditto the “scourge du jour” Russia, who apparently terrifies us with a defense budget 1/10 of ours.
It is nonsense to think that the wealth tax proposed by Warren will stifle entrepreneurship or reduce investment. I doubt anyone would say that they are not going to invest in a business because if they become a $50 millionaire or more they will have to pay an extra 2%. They will still be in the top 0.01%. How greedy can these people be?
2
Why quote Mnuchin at all? You think he's got a thought in his head at all that does not include him? Aren't we pretty sure he's a very bad guy placed there specifically to do very bad things? Economists have a problem with socialism, they don't even study it, it doesn't exist. It has the seemingly fatal flaw of "why would anyone work?" Look to medieval England where the lawyers of the time stole the land of the peasants to force them into the cities to work in factories so the rich could both steal their land and force them to labor under horrific conditions. Economists prop up capitalism. Economists are shills for the rich and only the rich. Mnuchin is the most egregious example perhaps in history.
1
The argument that taxing the rich will ruin the economy is absurd, no matter how ostentatious they are the rich can only wear one pair of shoes at a time just like the rest of us, granted that pair may be a very costly hand made pair from France as opposed to the junk made in China the rest of us probably wear and they may have another hundred pairs in the closet but it’s still one pair at a time, wouldn’t it be better if everyone could have a pair or two of high quality made in America shoes again, it’s a proven fact that buying quality is cheaper in the long run, it’s just that so many of our current retailers business models are built on selling you Asian junk that you will have to constantly replace. They can only eat so much and as hard as they try they can only have so many homes. Nope taking ninety percent of their money(a better figure as far as Im concerned)over say fifty million won’t effect the economy one bit because the fact is all those extra billions do nothing but set in their accounts earning them more billions and if that money were put to work by the government rebuilding our nation in a WPA type program the trillions would generate good paying jobs for American citizens, next bring back manufacturing, because those who get a paycheck are certain to pay their fair share of taxes unlike so many of our current small cash only businesses, Asian nail salons Coast to Coast are a prime example, there’s a reason they are cash only, the tax man.
1
Issues like this are not intrinsically capable of reasoned debate. Rather, they are more like religious disputes - you believe, or you do not, mainly as a matter of faith. Mainstream NYT readers believe (consciously or not) that all wealth belongs to the state, and that citizens are lucky to keep any of the wealth their efforts generate. A minority do not share this belief, and are castigated as "greedy" or unwilling to pay their "fair share" (and to clear up what "fair share" means if you are "rich" - it means all that you own).
3
More destitute people will try to get into this country to share in the extra benefits.
2
@Bob Give me a break. We don't have benefits. People here are literally dying.
1
This is the kind of leadership and vision our country and our democracy sorely need.
We have 27% of voters who are wired into the right-wing propaganda machine like they were part of the Matrix. The 29% who are Democrats need reach the rest of the voters who are independents. These people should be reachable with sound, common sense policies well communicated by a sane, rational leader who cares about them and is willing to battle the super rich and their unwitting serfs.
Elizabeth Warren springs to mind.
All of the so-called progressive European countries like France which had wealth taxes have gotten rid of them. Why? Because they were complex, easy to avoid, and raised only a small fraction of the money they were supposed to. So despite this obvious lesson Warren and Sanders keep tripping over each other to prove who hates the wealthy more.
4
All those deriding these taxes in this article are part of the same class that benefits from the current obscene wealth in this country. Their arguments should be seen for what they are-self serving and baseless. Are you seriously telling me that 49 million in wealth is not incentive enough to motivate people? Or that such minor taxes above 50 million will destroy that motivation? This does not pass the laugh test. If those at the top don't find it motivating enough, I can find you millions of other capable Americans that would happy to take their place!
It is widely understood by economists that income and wealth in the middle class does more to stimulate the economy. And economists have evaluated Warren's tax and found that it would not be a disincentive. Shame on the authors of this article for presenting such a one-sided evaluation of these taxes.
Greater economic stability in the middle class could result from the social programs these taxes would support, which would stimulate entrepreneurship and broad-based wealth more then some additional marginal wealth at the top.
1
I have a difficult time thinking if Bezos was worth 50 billion dollars as opposed to 100 billion dollars the sky would fall. At some point doesn't all these billions become some what pointless? I remember Warren Buffet once saying in an interview he doesn't recall anyone saying they would pass up a good investment because they wouldn't want to pay tax on the earnings. Wage earners must pay a certain percentage, you can't get out of it. The super rich use lawyers and accountants to game the system, and in some cases pay NOTHING. This is why people are angry. As for Mr. Dimon - saying that the money might be "wasted" is insulting. Investing in our infrastructure, education and environment isn't a waste. Yes, the government has inefficiencies. I would remind him however, that some of the largest "wasteful" government costs were due to his industry's excesses and greed. The taxpayers are due a rebate.
1
@dairyfarmersdaughter The big banks paid back all their bailout funds, with interest. GM never paid back a dime.
@Richard That may be true, but the cost to the citizens in lost wages, their homes, etc due to the actions of the big banks must be considered. I recall the Savings and Loan debacle...you can't convince me all this didn't cost the taxpayer. Plus look at actions like those taken by Wells Fargo - the actually cheated their customers.
What we have here is a false debate with two reductive, self-serving and failed options:
1. Continually divert wealth upwards to an out-of-touch, mediocre, rich and powerful oligarchy who have been rigging and will never ever stop rigging the system in their favor while everyone else sees their hopes for a decent life in this country dwindle more and more with every passing day.
2. Divert the wealth post-exploitation to the government who has always and will always make false promises, choose winners and losers, further divide the nation according to regions, ethnicity, political affiliation, race, etc. and squander lots of the nations wealth in the process.
The foundation of the problem is that we have never asked the question what an economy is for in the first place. If it's not to provide for the common welfare (in the sense of promoting the good fortune, welfare and happiness of our country's people), then it is completely illegitimate. Is our economy even close to legitimate? Will diverting more wealth in either direction solve anything or just lead to more corruption and more misery for most hard-working patriotic Americans?
1
Maybe the GOP and Establishment Dems who are against taxing the 1% can explain to the American people, why being a millionaire, as opposed to a billionaire, just isn't enough money hoarded, for these people?
2
Arent these rich people the ones to give so much money to charities across the spectrum. Guess that will all dry up. Wonder who will fund art going forward.
1
'Jamie Dimon, the chief executive of JPMorgan Chase, said he feared that the federal government would squander the additional revenue.
“I know a lot of wealthy people who would be happy to pay more in taxes; they just think it’ll be wasted and be given to interest groups and stuff like that,” Mr. Dimon said.'
So says the man who stole tens of thousands of homes by selling bogus mortgages to cash in on their derivatives. Jamie Dimon is a lucky thief who ought to be in jail along with the rest of the banking executives. Thanks, Mr. Dimon, for trying to protect us from the evils of government.
1
Yeah. And Trump trade policy has reshaped the world economy. Destroying world trade and collaping the world economy - nothing the Democrats do can be worse than what Trump has done. How do business owners still support him?
Sap economic growth for whom?
Interesting to hear who is voicing the "concern"
1
Money spent by billionaires on their private pleasures is an epic waste. Doesn’t do much for the economy. Yeah, building a 400 million yacht in Rotterdam is such an stimulus, right? Building a super mansion on Pacific island is such a stimulus, right? There is about 20 trillions of American private money offshore. Epic waste.
However, money spent by the the government is never a waste. It is is only a question of spending on justifiable priorities. Is spending on cleaning rivers a waste? Is spending on equipping schools with hight tech gadgets a waste? Is spending on mass transit a waste? All this spending create millions of jobs and stimulate domestic economy.
1
The private pleasure won’t dry up. But investment in franchises, small businesses, real estate will....and so will charitable giving.
It's not only evidently unfair to be "worth" billions, but such a disproportionate wealth gives a few non elected billionaires the real power which should rest with the political bodies;
The consequence of this disorder is that economic choices are made, not to benefit the people, but to only to increase ad eternum the wealth of a few.
Drilling or logging on National Parks, authorizing gas guzling vehicules, paying fortunes to lobbyist and "contributing" to election expenses in order to obtain tax advntages are just a few exzmples.
And even advancing the idea that a 2 cents on the dollar would bting aconomicx chaos is in itsel evidence of these abuses;
Who can believe that these multibillionaires would be discouraged to pursue their busines because of such a tax,
Even a number of them have call for such reforms.
What does Warren think about Re-Education camps for Republican voters?
Should the re-education camps be a part of her Universal Health Care Plan?
It would be very helpful if she could come up with a set of rules for us to follow.
She could put her rules and proper left-wing etiquette in a "little blue book" and everyone could carry it around with them and refer to it throughout their day. This would be so great.
1
Stevie Munchkin weighs in. Stevie Munchkin is oh so terrified that our economy might benefit someone other than himself & his employers. How many pairs of #valentinorockstudheels did Mrs. Stevie buy this week? Meanwhile, average Americans die because they cannot afford basic insulin. People delay treatment and/or skip taking vital blood pressure meds because their "health insurance" is inadequate. American cities continue to suffer from dangerously polluted tap water. And what happened to all that concern about helping more opioid addicts recover? Infrastructure repair & modernization? Improving our public school system? Yet somehow there is always plenty of federal money available to give Stevie & his greedy vacuous ilk a huge tax break.
2
Look no further than the prosperous middle class of the 50's and 60's, the result of FDR's socialist policies, to see the stark difference.
Reagonomics and the trickle down lie gave us today's extreme economic inequality.
1
The massive tax cut that the GOP passed produced only a slight sugar high that was never sustainable. Meanwhile companies plowed most of their tax breaks into stock buy backs further enhancing their wealth. I don't see how either plan saps economic growth or harms productivity.
One unmentioned byproduct of a plan like this would remove corrupting money from politics and preclude people like Aunt Becky from trying to game the college entrance system.
Take their money away and they cant pervert our country for their own benefit and harm the dirty unwashed masses in the process.
1
Absurd. How could economic growth be stunted if the extra BILLIONS that the 1% rake in every year get put towards finally improving the infrastructure, the broken education system, job training, etc?
The system is supposed to work for the people as much as the people work for the system. If these CEOs weren't so unbelievably greedy, maybe life would be a lot different in this country. One thing they will not escape is death. One day, they will die. Are they going to bury their billions in their coffins along with them?
1
Somebody's preaching more fairy tales of eternal economic growth. It's unsustainable. Eat the rich!
So help me understand this.
If by some bizare chance a person of modest income were given a Rembrandt by a rich Aunt and that Rembrant was worth $51 million, then the person of modest means would have to pay over $1 million a year in taxes?
Or, lets say a long struggling but prolific artist (pick your medium) became famous and their personal portfolio all of a sudden became worth hundreds of millions, that the long struggling cash poor artist would be faced with having to pay millions in taxes every year or have to liguidate their art?
Or how about a muscian, how much is Madonna's portfolio of music worth? Or how about authors, how much is Steven King's copyrights worth?? List list goes on.
One thing for sure, this would solve the immigration problem and make for a new bread of tax laywers.
2
So Warrens plan is to have a coop full of golden egg laying geese from which she'll harvest their eggs. She won't take all of them, just some, for distribution to the less fortunate amongst us. Over time people will come to expect more entitlements and the leadership will have no choice but to increase the quantity of egg grab. All is well and good until one day the geese get out and fly away to a place that doesn't take any, or as many of their eggs. The end.
2
Oh gimme a break. If you're a billionaire and lose two percent of your wealth, you'll be fine. And if you won't, then you shouldn't have the billions in the first place.
1
Basically, you're saying it's ok economically to tax those who make the least, but not those who make the most? Sorry, not sorry, corporations are not people, too! And those people who own corporations shouldn't be permitted to do their double dip side dance to avoid paying their fair share of taxes. Stop endorsing welfare for the wealthy!
2
You talk about 'redistribution': What about the massive 40-year redistribution of incomes and funds for social investment from average American working people and their communities to that infinitesimal minority in the .01 percent?
Dave Rorick
San Francisco and Portland Maine
1
Oh right. It could sap that 1-2 % economic growth that we're looking at in the coming months. So what will happen instead if the economy slows even more. Another tax cut that will, you know create capital by pushing more resource to the top. It's worked wonderfully for the last 40 years why not? 3 major recession including 2 bubbles, 1 near depression. How many more tax cuts, deregulation to exploit the environment, etc. will we need before we have an economy built to last? Neo-liberalism is NOT working. Corporatism is NOT working. Concentrated wealth is NOT working. A democratized economy will create more wealth, more business, more jobs.
5
Economic inequality is a huge problem in our country. I'm not an economist; but, here a few somewhat off the cuff thoughts regarding the unintended consequences of this form of wealth redistribution. Tax the wealthy has become the mantra of the progressive left. Are there no more creative options available -- even in theory? Also: the financial sector is the strongest segment of market. It has been for quite some time, much to the detriment of research and development and the productive sector of the economy. Isn't the financial sector the most mobile sector of an already foot loose global capitalist class? How would this sector of the market respond to higher taxation? Perhaps these are naive questions; I am trying to think through the issue and learn more about how this complex economic behemoth actually works. Left populism (tax the rich) doesn't go beyond the surface.
1
If the uber-wealthy can't be grateful for and live their best lives and highest dreams on a maximum of, say, 25 million dollars a year, then perhaps they don't deserve that kind of wealth.
6
Get real. That $25 million won't buy a lot of property in NYC or London. How will they eat?
1
@Margo
I guess by budgeting, like the rest of us... ;)
Do you really think that Bezos or Musk or Zuckerberg or Gates would not have created their organizations if they were disincentivized by taxes?
6
Thanks for giving yet another chance for the most powerful people in the world to protect themselves from a horrible future where they have to help others.
This framing is bad and disingenuous because you're giving cover to what the wealthy are doing: threatening to withdraw their enormous capital advantage from the economy if they have to pay any of it for social programs that would benefit everyone.
Try "We tax the wealthiest more, leaving them still with more than almost everyone else, and hundreds of thousands will be healthier and not die earlier because of lack of good healthcare and shelter; or we don't and lots of people continue suffer."
I bet if you interview an actually left-leaning economist, not a hardcore neoliberal like Summers you might more diversity of opinion, as well.
2
Creating wealth through tax breaks for the rich is OK, but taxing that same falsely created wealth is an economic threat? To whom? The newly perpetually rich or scam artists like the White House residents who know how to use the levers of influence to get hotels and trademarks gratis? Is the biggest budget for defense to protect those who sleep under bridges or those who clip coupons for minimally taxed wealth? Warren is on to something.
1
The reason this wealth tax is even a consideration in USA is the complete success of the Republican Party. Government in recent years has become totally incompetent. We can’t fight wars very well. Income inequality and education are very poor. Social injustice abounds in all quarters. Capitalism has been corrupted and rigged to destroy its lifeblood— competition.
Our government is supposed to protect the homeland(including the environment), ensure a level playing field in business, rigorously defend truth and justice for all to see, and to invest in our people to insure the future.
An America that strives to be better would encompass those values. We would have a very broad and resilient middle class and wealthy that are still in view. A world in which only a few owned everything has been done in the past and we didn’t like it. That was feudalism.
1
The saddest part is that it isn't the billionaires themselves who fight against higher taxes or try to avoid them. It's their highly paid sycophantic army of advisers (accountants, lobbyists, tax attorneys, financial advisers) who fight tooth and nail to maximize their client's wealth in order to justify their own (enormous) fees.
1
It's a whole industry.
2
To be fair why not take all assets away from anyone with $1 million or more and distribute it to anyone with assets under $1million .That would get rid of all the asset disparity.
1
Too bad Warren's plan is solidly grounded in research based on positive outcomes. She can point to numerous examples where the ideas she is proposing have successfully worked. Ah pesky thing about facts, they are true whether we like them or not.
1
It's strange that this article only includes comments from economists who think the wealth tax would slow the economy. There are plenty of mainstream economists who believe moving money from the top of the wealth distribution to the middle and low wealth parts of the nation would improve the economy. The effect of people with less money spending their money more quickly than people with more is an increase to GNP as inequality lessens (the velocity of money effect). Why does this article push the disproven conservative talking point that "a wealth tax would be bad for the economy"? I always hope the Times will report with less bias, but this article presses the scales against the economic consensus.
1
I have long supported the wealthy and still do, to an extent. I need to know where money is going however. I see so much waste. So much laziness. So many giveaways. When you see that, you become mistrustful of tax increases.
Who knows what the government might spend the revenue on, Health Care? Education? A Renewable Energy System. No what we need is more mansions, yachts, private jets, megabanks and insane financial schemes.
1
This idea of more money at the top is good for us all is belied by the last 40 years. Are we really going to fall for this canard again?
1
For far FAR too long, American citizens have watched tax dollars funneled to pay for weapons that, if used, would tear our civilization apart. Certainly claiming a share of the personal fortunes of the wealthiest would make for a more satisfied world where everyone would be happy enough that the U.S. insatiable appetite for war would ultimately allow less money to be spent on war and violence. Certainly military spending is the most wasteful of all expenditures.
The problem isn't just billionaires. The problem is underpaid workers. If you want to make America great again you need to increase the minimum wage so people can have the money to spend. Concentrated wealth in the hands of big banks and wealthy individuals is choking the economy. More yachts, planes and mansions won't replace the broad buying power of the middle class. And putting people in debt to banks that bleed money out of borrowers will only leave the middle class perpetually in debt.
2
Despite the roster of "eminent" economists coming out in oppostion to increasing taxes on tremendous wealth, I don't buy that position and I strongly doubt there is empirical evidence to prove their point. The empirical evidence I have is the last several decades and the trickle down theories and "disincentivise entrepenureal spirit" arguments are a bunch of hogwash (certainly in the case of trickle down). Those arguments boil down to saying that the super wealthy class is necessary for a robust economy. That's baloney and most everyone who isn't in the .1% (or funded by them) knows it.
Given the Democratic (Warren and Sanders) plan to bust up big business, I wouldn't worry about them getting elected. There are a lot of independents who work for big business, depend on big business, or appreciate the benefits we have gotten from big business .... (and many of them don't want to give up their private health insurance.) If the Dems don't have a viable candidate who will reign in the abuses of big business without busting them up, we can expect 4 more years of Trump.
It's not radical at all.
it's how our Taxes were for most of the 20th Century, which saw a huge number of Americans come out of poverty and didn't hurt the rich at all. As far as I know, they were still able to eat all the roasted pheasant they wanted and get ahead in. virtually every activity.
Bring it back!
1
So the "business leaders and economists" who object to plans like Warren's and Sander's are singing from the same hymnal as Steve Mnuchin, our Treasury Secretary.
Hmmm, Steve Mnuchin: Made millions at Goldman Sachs and several hedge funds. Was on the board at Sears/K-Mart while those two flagship brands bit the dust and thousands lost their jobs. Was sued for asset stripping them on the way down. That's some kind of business leader, boy.
His vision of economic growth is continued wealth accumulation for himself and his fellow plutocrats, and crumbs for most of the rest of us.
Some folks like myself can "draft" a little off people like Mnuchin and his ilk. The stock market goes up, making them fabulously wealthy. My 401(k) goes up so I don't die in poverty and maybe (just maybe) end my days in a bit of comfort.
The rising tide of Mnuchin's "economic growth" lifts his yachts to new heights, while folks (like me) in rowboats stay inches off the reef, and the folks clinging to flotsam and jetsam (like most Americans) just barely keep from drowning.
Warren and Sanders are on to something.
To mix a metaphor, they get that it is well past time to cease this mindless genuflecting at the altar of capitalism, hypnotized by the archpriests of Wall Street as they parade about in splendid robes and live in luxurious cathedrals.
It's well past time to cleanse our economy of this pestilence and do the real work of raising up the many instead of enriching the few.
1
What a spin. The uber wealthy will always invest. That's how they got there and that's how they'll stay there. It is silly to think that higher taxes will disincentivize Besos et al. What els are they going to do with all their funds. It's not like we will all stop spending. In fact, if we rearrange the use of money to assure a decent standard of living for everyone, there will be far more economic activity. Come one, economists, try living down here for a week.
1
Milton Friedman in 80’s said companies primary goal is to maximize stockholder equity. Then people have to build their own nest eggs, which Wall Street does based on company stock value. THEN the US offshores jobs so that - Guess What? Stockholder equity increases. Meantime there’s no real entry level positions for our young people, who sensibly go to college because out economy needs knowledge workers.
Yes. It is rigged.
3
Yes, you make sense. And this would have become considerably worse for US workers if the TPP and TTIP participation had occurred.
3
We should not forget that USA is the only country in the world in which the 'poor' are always concerned that the 'rich' are not overtaxed. How else to explain that any idea of even modestly extra-taxing the milords and miladies does not ring well with the voters? Why would we, everyday folks, ever care if they are taxed a tiny bit more than now, and lose a couple of millions out of their hundreds of millions? They did not even earn that money, it's either monopoly or capital, certainly not any work.
As far as he voices from academia calling for caution on this matter, that's just preposterous.
2
Big surprise the rich don't want a penny taken from their greedy hands. They want to continue hoarding almost all of the money supply. Every cent they keep is one less cent for anyone else.
1
The Interstate Highway system helped make multi million dollar corporations. And it happened because they were taxed into creating something that ultimately benefited them.
Keep whining, Wall Street.
2
It’s a different world, but, check the tax rates on the wealthy during the Eisenhower (Republican) years...
1
What do you even do with 50 million dollars? Can't we just have an innovator award ceremony every year, like the Oscars? That way everybody's ego remains intact. And if you are genuinely concerned about lack of innovation, why not give tax breaks only to people who are innovating in really useful areas-- curing cancer, reducing car accidents and such? How helpful is innovation when it's resulting in smart toasters? (And I do realize that smart products are increasing quality of life for those with disabilities. Market them and design them specifically to be most helpful to those groups, let insurance pay for them, etc. and then you can qualify for a medical innovation tax break.)
1
Opponents lament the notion that these laws would stifle investment and entrepreneurship. This assumes that the economic fantasy of Reaganomics is a fact. The truth is that if there is a demand for a given product or service, somebody is going to find a way to sell it, and the money for payment of employees comes not from the personal finances of the entrepreneur, but is included in the cost of goods sold.
5
Am I the only one who is concerned by Bernie's plan to create a National Wealth Registry? It seem like almost every week I read in the NYT about the loss of privacy due to social media. I am much more concerned about having the government tracking all of my assets on a yearly basis. I expect that the requirement for reporting by third party service providers will cover all citizens.
3
Here's a thought: if the wealthy are genuinely worried about where their tax dollars might go, they can always:
1) push for fewer wars, and disincentivize the profit involved in the U.S. going to war, perhaps by eliminating all private military contracts
2) spend their money lobbying for smarter spending and accountability programs, like the program Obama successfully created to eliminate billions in Medicare fraud
3) spend their time pushing for more efficient medical spending (which is a huge percentage of government spending) by fighting the stranglehold of pharmaceutical companies on public policy.
That gives the billionaires plenty to do with their energy instead of getting upset about having to rent out their fifth vacation home and sell their second yacht.
3
In the past, I would oppose a wealth tax because it would be double taxation. However, we just saw the deceased billionaire Koch's heirs get a tax-free inheritance of Billions. So now I'm okay with taxing wealth. And while we're at it corporate taxes should be based on SEC declared profits or the exisiting method which ever is highest. Avoiding tax thru loophole is anti-American.
3
MOST of Ms Warren's plan makes sense to me, however, Mr Sanders seems to want to punish people for being successful! I'm still looking forward to hearing the nitty gritty of each of their plans. I can easily buy into universal childcare without it's punishing financial consequence on young families. The rest remains dubious concepts until I hear more.
Warren and Sanders think like autocrats who see themselves as controlling events on behalf of the common good. So instead of crafting a plan to restore a more equitable system supported by a consensus, they just cut through all the complexity and propose a radical redistribution by confiscating the assets of the super rich. The destructive consequences to our liberal democracy is totally ignored. We my end up with less disparate amounts of wealth but end up with an illiberal populist regime instead of a liberal democratic one. Trump, Warren, and Sanders all pressing to create the same kind of result, differing only by who benefits.
Restore higher tax rates according to a progressive system. Let that restore the equity.
2
For the sake of argument, let's assume a Democrat is elected as POTUS in 2020. If the Republicans hold the Senate or even win back the House; this idea is dead on arrival. However, let's assume the Democrats capture the White House, the Senate, and the House. Before people start thinking about how to spend this new found money; why don't we pay our debts first? Baby Boomers are retiring in large numbers for about 10 more years. Plus, you have the first half of Boomers that have already retired. Fix Social Security with the new monies. Next, the National debt; first try to actually have a balanced budget. Which has not happened in a generation (two years in the 1990's). Plus, try paying down the $22 Trillion debt. Show evidence of these measures and consumer confidence will likely rise and generate job growth. However, with an aging population, immigrants need to be welcomed back into our country to help grow the economy. Workers are retiring faster than they can be replaced in several parts of the country. Generation X is smaller than the Baby Boomers, Millennials have approximately the same numbers as the Boomers. Both generations are essentially established in the workforce. Thus, the economy is banking on Generation Z (20 somethings) to fill the void left by Boomers. Have a Gen Z is still in middle school, high school, and college! The math doesn't add up. Thus, new taxes alone don't solve our economic problems. The two problems must be solved together.
2
Warren’s plan is very similar to the Islamic concept of zakat, which is on a practical level a 2.5% annual wealth tax. Reports from lands where this was implemented describe an almost complete absence of poverty.
1
Let's keep religion out of this.
How about giving out an extremely reasonable scaling back of tax breaks and super-simplify the entire tax code.
We need to remove absolutely ALL tax breaks for everybody, no more favoritism in one corporation type getting protectons, like Sugar manufacture, or govt backed coal, etc, remove all the individual personal deductions, business deductions etc and set the tax rate at 50%.
However, give Every adult over 21 who has done National Service of some sort (lots of possibilities in showing people life outside of cities or their tiny patch of sky) A single, refundable $50k tax break for everyone.
For the Rich it would limit any sort of deduction gaming, and for the rest of us it would give us a base income, male and female adults, each with enough money to raise a family on.
To say it will deincentivize work? No, because there are things people want and need and professionals who WANT and LIKE to do their jobs. Some construction people feel like artists, but it WILL make employers pay more attention to wages, working conditions and what their employees think since without making the Labor Happy you plain will not HAVE labor.
Labor will ALWAYS be there, some will do more to have more, some enjoy the labor as a workout, I know I did as a heavy duty welder.
But it would certainly put the buying power back where it needs to be, in the hands of The Many' with a lot of velocity, vs zero sitting with Bezos other bewildering bounty of bux in the bank. Doing Nothing for Humanity.
2
Compare the impact of taxing the wealthy to the impact of Trump's trade wars. Which is worse for the economy?
2
Well if the wealthy ere more generous then the tax system would not have to changed. Bezos from Amazon worth 140 billion wanted tax breaks for building in NYC . Tax breaks lead to lower salaries for teachers, police, and firemen. Double the taxes on the wealthy until they understand to give back more to society and workers. He opened a supermarket with very few employees. Technology will wipe out millions of jobs with driverless cars and trucks coming. Raise taxes to 85% on stock options and salaries ND existing wealth on those worth more then one billion and tax all foundations thatvthry donated to 50%. These wealthy billionaires avoid taxation by starting foundations. Tax them all st 50%
2
"Their plans envision an enormous transfer of money from the wealthy to ordinary people..."
From each according to his ability (ok, his and her ability, or maybe their ability) to each according to his need.
Where have I heard that before?
3
And the current negative economic effects of great wealth in the hands of a few? That is what we should be discussing. How about the evidence that the wealthy mostly hoard and hide their wealth such as Mittens Romney, in their offshore havens? Investing in job creation? The 0.01% have had most of the wealth these last 40 years, what is the evidence that the Middle Class Family has improved because of this hoarding of wealth? That the next reality show I wish to watch, AmeriKKKa's Wealth Hoarders.
1
Look up recent NYT article on Warrens and Yang tax plan. Yang’s value added tax (V.A.T) is more pragmatic, wouldn’t punish the money saver, and easier to implement. A value added tax has already been implemented in other advanced economies and has no loop holes.
Perhaps this is a way to get powerful interests to align around electoral college reform?
Call me crazy, but I don’t think those powerful Wisconsinites are not going to be crying when 70,000 coastal billionaires are told to cough up 2 cents on the dollar for health care and education.
1
I'm from NY. I knew families of CEOs and senior corporate executives, as I grew up in the 60s and 70s. Most did not live over-the-top lavish lives of wealth display and material consumption. Something has changed much for the worse in the United States since the time of Reagan. Celebrity wealth is now a thing, an ugly thing. Let's tax wealth aggressively and re-purpose it to basic functions of government, including infrastructure and our neediest neighbors. I don't care what the emotional impact is to the wealthy. You can't really hurt them. They will always have plenty. And if they run out (I know some just like that!), we'll take care of them.
3
"Jamie Dimon, the chief executive of JPMorgan Chase, said he feared that the federal government would squander the additional revenue." As opposed to, say, all the good that people like the Kardashians have done for the world? Or the lack of squandering that goes on now to fly Trump and his family around the world or up and down the Eastern corridor with jet planes, security personnel, and who knows what else? How many houses, cars, and boats do you need? Give me a break!
I think of Dimon as one of the better guys. If he does not want this, let's go back to the income taxing structure of the 50's, adjusted for inflation, when the rate was 90% on income over $200,000.That was a pretty prosperous time. Masses of people were not looking for parking lots to park their car so their family could get a night's sleep until 6:30 a.m., and every veteran got a free college education. It would be a whole lot easier than figuring out how to value paintings and jewelry. Something though has to give. Elizabeth Warren may cost me some more in taxes, but I know she will not leave the world worse than it is now, unlike anyone supported by those who stand to lose from and oppose a wealth tax will.
2
It’s not difficult to imagine a host of negative consequences that could accrue with administering a tax on accrued wealth, many mentioned in this piece. We currently have a system that measures and taxes transactions and income, but wealth is often a much more subjective concept. I see that as a big leap, not a simple thing like Sanders and Warren suggest.
What would be much simper to implement is higher income taxes or sales taxes. Of course sales taxes would have an effect on many small businesses, so it would have to be implemented in a measured way. It seems to be to be much less complicated to remove existing loopholes in the income tax system.
All of this will be difficult because the wealthy are the ones who make political donations, so their is a built-in disincentive for politicians to support increasing taxes. Coupled with the prevailing attitude that wealthy people maintain–we know how to utilize our wealth and poor people will just waste any tax benefit they receive–will make this a heavy lift. We’ve already seen the whining about impending socialism and the blatantly inaccurate conflation of that term with the nationalizing of the means of production practiced by totalitarian, communist regimes.
I’m not convinced this is a winning ticket for defeating Trump. Let’s stick to the knitting: he and his Republican enablers are corrupt, and he is incompetent. That’s enough to convince a majority of voters.
What is wrong with restricting a dysfunctional economy?
2
When we had truly progressive tax rates we had substantial economic growth. We had wage growth. We had true full employment. We had meaningful social security payments (my grandparents lived quite comfortably on it). But, what? Inflation? These made up numbers excluding housing, food, energy, education, medical and dental care tell us nothing about inflation. They are used limit c.o.l.a. s for us regular people. Actual inflation is higher than it was in the 60s. True employment is lower than in the 60s, ie true unemployment is much much higher than reported. Who has seen benefits with all this? Right! CEOs who run companies into the ground, government bureaucracies who do less and less, and oligarchs and their heirs who essentially pay less than zero tax. Demand side economics tax policies fuel demand and thereby growth. Trickle on economics fuels and foments anger and resentment. Take your pick. But stop scaring us with headlines that say feeding the pigs at top need more or we’re all going to suffer.
1
What the super rich already have more money than tey know how to spend. What they really want is more power. This gives them various perks, including having college professors like Summers and Mankiw look after their interests.
1
the issue is not taxing the wealthy at certain levels, but it's how that money will be used.
If it is used to re-build our crumbling infrastructure that's a good thing, including in this more green initiatives.
If it creates a second tier health system for those who cannot afford care now, but does not affect plans for those who like them, that is a good thing.
If it creates housing for those who will actually utilize it, keep it clean and start a new life drug free, with the opportunity to give their children a better life that is a good thing.
But if it goes to an endless list of reparations, housing with no restrictions, free college with no restrictions, endless encouragement of welfare, having multiple children with disregard for proper care, and some sort of universal income for just being alive these are all bad things.
And will waste this money, and create an endless government that will then come for the money of those less wealthy.
3
This certainly would change the US economy altho the headline seems to make it a negative. Fairness, good pay and health care are not exactly ideas to devastate the economy. It only means that the super wealthy may not be able to afford more then 1 or 2 yachts or their own private plan. Would that be sad? Add up the co-pays and insurance premiums that we all pay and the amount would pay for Medicare for All.
1
Envy politics and demagoguery. Plain and simple. They want to confiscate property (wealth) to use it for their own ends, which of course are shining right and true. Unbelievable.
Of course they're worried. Because for 40 years they've been pushing the trickle down fallacy.
Taxes went up during Clinton and Obama and the economy did just find.
They need to get with the program and stop protecting or making excuses for the monied classes.
Time for labor to gets it's due again.
1
Since unfettered economic growth has directly and indirectly led to our current climate armageddon, curbing it by any means possible should be considered a good thing.
2
Maybe skepticism on this issue would be taken more seriously if we didn't just cut taxes for these same people to spur economic growth (personally, I laugh at the establishment figures that are always featured in these pearl-clutching articles).
What happened? Where is the 3 to 4% growth we were promised? More importantly, would anyone outside of the owner class have seen the dividends from that promised growth? I personally doubt it
1
"Redistribution of wealth" is intrinsically pejorative and conveys a implicit message that such measures are a form of undeserved welfare. The wealthy love to boast that they are self made but that is patently false. Underlying their wealth is a multitude of workers and citizens who have set aside their inalienable rights for the purpose of promoting the common good. The people of the US have a right to benefit from that common good. That is why they have given their consent to be governed. Taxing the wealthy is one of many possible ways to economically express those rights.
Taxing stock dividends is another way to reward the people of US for their consent to be governed. Effectively, the people of the US should own 10 to even 20 percent of stocks. Every distribution of monies received by stock owners should be taxed.
The unwavering expectation that such measures would damage the economy are pure baloney. Certainly the recycling of our economic bounty can be over done since most of the money distributed to the people will be spent. Right now, we are laboring under the yoke of insufficient spending. The measures that big money have enacted through legalized bribery have pushed more and more money into equity leaving less and less to be spent.
1
You know what saps economic growth? People in the middle and the bottom of the economic ladder having less money to spend. Tying massive amount of wealth up in the hands of the few means the money is not circulating-- that is, it is limiting growth.
2
Rhetorically the wealth tax is brilliant, but a national Value Added Tax would be a thousand times more effective. Across the EU, VAT's run at around 20% and in France it makes up fully half the national tax revenue. Unfortunately, dems characterize a VAT as being regressive, though it's a flat tax, when the real question is what the revenue is going to be spent on. A flat tax spent on low-income housing to address the homeless crisis, for example, is progressive relative to a progressive income tax spent on military. So, they're missing half the equation. And the reason the EU leans so heavily on their VAT's is that they're virtually impossible to cheat on. And hey, look at how supportive republicans have been of the tariffs! They suddenly consider paying taxes to be patriotic! Pay attention liberals!
The economy need reshaping. The paradigm of continued growth requires either exponential population growth or ever increasing individual demand for more "stuff". The first is ecologically insane, the second is spiritually bankrupt.
Your sub headline makes it sound like there is a consensus among economists that a wealth tax like the one proposed by Sen Warren would sap economic growth. But the article doesn’t remotely support that. In fact, some economists quoted in the article believe it would increase growth.
1
As somebody who has lived and worked three decades in a communist system, let me give the comrades some tested advice:
First, take away wealth from the rich, in yearly installments if you can’t just confiscate it in one bold move.
Second, ruin the economy and put the unemployed in guaranteed, life long government jobs, which pay just enough to survive from one paycheck to the other. Luxury items like meat, sugar, flour shall be rationed.
This army of dependent government workers shall forever vote for you, or else no more rations. This is how you get the Democratic Socialism to work like a well-oiled machine (we used to call it Popular Democracy).
If somebody has a problem with all that, cancel them. I don’t mean that feeble “cancel on the social media”, but the real thing... for good. It has been done, and it can be done again.
@Gimme A. Break
And where did the money go when the USSR went belly up? They created a whole class of oligarchs.
But you prefer an army of dependent rich living on their inherited wealth, correct?
Furthermore, I am quite certain that the democrat socialists countries of northern Europe, Canada, Japan and others give the complete lie to your line of reasoning. Their people are happier, wealthier, more secure, and live longer than we do. Pretty hard to beat that with plutocracy.
OK. everyone hates billionaires, but the wealth tax is a "not-so-smart" approach. Since the article fails to explain why a wealth tax would slow down growth and why it is bad, here is a simple example:
A Doctor starts a company to develop a cancer treatment. The company develops a cure, so the financial experts value the company at $100 million dollars. This means that a doctor needs to pay 2% or $2 million a year. However, the company is private. The doctor, does not have access to the money to pay this tax. In fact, she only gets a small salary since most of her compensation is in stock. Since she owes IRS $2 million, instead of growing her company and developing other cures, she now sells the company to pharma giant to pay the tax. Big Pharma does not need additional administrative staff-so layoffs, offices of the company get shutdown - no cleaning staff, etc., etc. This slows down growth. For those of you who are familiar with capital raising, you will also note that most entrepreneurs would avoid raising capital that values their company above the $50 million threshold for the above reasons, which further slows down economy - as lack of funds slows hiring.
Again, if you want to tax rich folks, do it a smart way, tax them through VAT. For more issues on wealth tax read NYT article: https://www.nytimes.com/2019/09/27/business/yang-warren-taxes-mankiw.html
How has taxing the wealthy worked out for Denmark, Sweden and Norway? Pretty well.
2
This is beyond absurd. Millionaires and billionaires contribute little or nothing to the economy, but rather actually detract from it by putting their money in speculative investments. Working class Americans are the drivers of the economy, since they spend their money on productive goods and services. Right now, medical costs are outrageous and unchecked owing to the current for profit healthcare. "Free markets" (free for whom?) do not work in this sector (and a number of others to varying degrees) because there is no real consumer choice (pay or suffer and die is not a choice). Medicare for all actually boosts economic productivity by drastically reducing costs (see every other advanced economy for examples) owing to a lack of a profit motive and thereby freeing up huge amounts of money, which working people can and will spend productive goods and services. It will also significantly reduce employers' labor costs by eliminating any need to provide medical insurance )even if their taxes go up to help pay for this). America needs a healthy and productive workforce. Nobody needs millionaires and billionaires.
1
What economic growth? The GDP? Far as I can tell, none of us below the top 5% have ever felt it.
2
Business 'leaders' pretend that taxes inhibit 'growth'?
How come we had growth and profits when in GOP Pres Eisenhower's 1950s, top marginal tax rates on highest incomes was -- 91%?
How come the middle/working class expanded, with consumer demand, and jobs stayed here, not offshored for profits?
How come pay and benefits rose, with unions, and secure jobs in regulated companies?
How come we could afford to build the national interstate highway system, the biggest infrastructure project in history?
How come tax supported state college tuition was centrist policy?
If Warren & Sanders wealth tax is 'an enormous transfer of money from the wealthy to ordinary people', it is to counteract the destructive effects of the enormous transfer of wealth from our national productivity up to the 1 %, with ordinary citizens losing out.
This see dangerous concentration of political power. The 2010 Citizens United Court decision removed the limits on mega donor money in elections, transferring political influence up to the 1% elites, weakening that of average citizens.
Politicans who benefit from rising profits applied to campaign donations use the excuse that unregulated private profit equates to "American Freedom" from 'Big Govt'. The result is weakening of govt by We the People, and less representation for our taxation.
They pretend to uphold the American ideal while they contradict it---undermining opportunity, security and upward mobility of average citizens.
1
I love the idea of a wealth tax. Why should individuals who are only earning income through investments not have to pay taxes like the rest of us. The greatest threat to our democracy is to develop a system in which there are ultra wealthy and extremely poor people living in the same society.
161
@LAM "The wealth taxes under discussion would deal a major blow to the balance sheets of American plutocrats like Jeff Bezos, Bill Gates and Warren Buffett. If the tax that Ms. Warren has called for had been in place since 1982, the net worth of the 15 richest Americans in 2018 would have been half as much, according to two economists who helped develop her plan. The Sanders wealth tax, which was released last week, would have eroded their fortunes even further, to barely one-fifth of their 2018 total."
And yet they would still be very rich wouldn't they? In exchange that money could have gone to higher wages, health care, education, infrastructure. Instead it goes into the game of who has the most wealth.
20
@DRTmunich No that money would not be put into the hands of workers to increase their standards of living. It would go into the hands of government to spend much in the same way as they always have. A huge proportion would be wasted.
16
@DRTmunich
That hypothetical money would have gone to fuel public union largess and unsustainable pension benefits, on top of increased welfare which would have further worsened the illegal immigration crisis.
8
See Joseph Stiglitz, who argues that much of today's wealth arises from market power and rent seeking rather than innovations and entrepreneurial activity. Monopolies exercise power over the market place that allows them to extract wealth from the consumer. Consider big pharma, for example, who tweak their patents to shut down any competition. I say let's revise Henry George's single taxer scheme and go after the rent seekers.
2
Economic growth might be helping the very rich and the obscenely rich but the rest of us are stuck with rising rents and medical costs without getting raises that come close to making a dent in those extra costs. Minute by minute, we are making less and less.
3
yes, of course, because there is such widespread support among economists that reduced taxes on the wealthy and extreme wealth and income inequality produces economic growth.
@John Smith Economic growth is a result of investing in the economy. Billionaires don’t make their money off of income. We have a large scale economy that can’t be funded off of entrepreneurship alone. Investment is critical in expanding economic activity. Capitalism is by far the greatest tool for planning economic activity.Centrally planned economies are always a failure in the long run.
We already have a wealth tax - it's called the estate tax. That, however, is filled with loopholes and faces the practical difficulty of valuing illiquid assets. My expectation is that a wealth tax would be just another poorly executed tax policy with many unintended consequences and poor collection results. Why don't we start with truly simplifying and broadening the existing tax system to make it more efficient and fair. Oh wait, that would take politicians and bureaucrats with actual knowledge of how our convoluted tax system actually works.
Historically we have taxed the wealthy at much higher rate than today.
The top tax rate was 90% up until JFK lowered it to 70%. Then Ronald Reagan lowered it to 50%. From there it kept getting lowered as our Deficits skyrocketed under the delusional Republican mantra of Supply Side economics.
It is time to scrap the supply side economics idea and return to fiscal sanity where the wealthy paid a higher amount.
1
The same house cost 3 times as much in New York than in Arkansas. You would tax them at the same rate? Would you refund the money if the real state market collapses?
Remember when the US at least pretended to believe in equal protection under the law? When liberty trumped the power of central planning? When we had a revolution over taxes?
The rich do not take money from the poor. The poor today are better off than ever before in history. There will always be inequality because that's how people are, and there's no economic model that suggests helping the least productive while harming the most productive works unless moving all towards poverty is the goal.
The rich and smart come to the US for the opportunities granted by liberty. The new model is to abandon liberty, take money from those they are jealous of, to give government ever more power in our lives and make the weak-minded ever more dependent on it.
1
9 of 12 European countries got rid of their wealth tax because, it didn't collect close to the amount projected and businesses fled hurting their economies. What the candidates really need to focus on is getting workers gain sharing from corporations, hence creating win wins for people, the economy and the nation. Lets work together.
1
Featuring Steve Mnuchin, who benefitted from the mortgage crisis, and Jamie Dimon, whose organization created collateralized debt obligation and benefitted from the bank bailout , about their opinion on taxing the wealthy is akin to asking Wayne LaPierre his opinion on gun control. Featuring it thus amounts to subtle propaganda.
Why no opinions from the economists who helped craft Sanders or Warren's plans? Why no opinions from labor leaders? Why no acknowledgement that classical economic formula attributes 65% of GDP to consumer spending. In an era of the worst maldistribution of wealth since the Gilded Age, why isn't this the starting point?
1
“Taxing capital is not a good thing for creating economic growth” says Steve Mnuchin.
What about the millions of Americans who would start a small business, buy a house, start investing for their retirement, etc., if only they could pay down their medical, student loan, or other debt? What kind of growth would we see if they finally get access to some disposable capital? Are they not worthy of Mr. Mnuchin’s consideration?
How convenient that these plutocrats don’t consider the opportunity cost inherent in living in this, one the most household debt-saddled countries in the world.
2
You know what else saps economic growth? Massive income disparity and a near-complete lack of a social safety net. We had less of both, and a booming economy, in the mid century, when taxes on the wealthy were exponentially higher. Explain that.
1
We already have a wealth tax. It's called the Inheritance Tax. Before we try to force people to sell off 2% of their assets every year to fund the government, we should consider raising the inheritance tax, the tax on capital gains, and on dividends. Trillions of dollars have been added to the national debt as a result of the Bush 2003 tax cut and the more recent Trump tax cut. President Obama should have announced on day one of his administration that he would sign no extension of the 2003 Bush tax cut. If Dems hadn't allowed Republicans intimidate them for the last 12 years, our children would have less debt burden today.
Eisenhower, a Republican, heavily taxed the rich. The late fifties were a time of unprecedented growth with new highways, new tech, funding for science. Most modern billionaires don't want to help the country that helped make them rich. They want to hoard the billions they'll never be able to spend in their lifetime.
Re these plans would use " ... revenue from the wealth tax ... to finance new social programs like tuition-free college, universal child care ..." Please note (1) "College" is NOT for everyone and (2) I'd bet my bottom tax dollar that these plans also would be used to fund so-called "trade schools," etc. How about 'tuition-free EDUCATION,' grades K-14?
It is not surprising that offering more money to people will garner their support. And it is clear that policies based on class envy are appealing since the rich are a minority and thus targeting them has little impact on the vote, and these policies align with the current rhetoric that all success is ill-gotten and thus unfair. But asides from academics, it seems that the majority of experienced entrepreneurs and business owners believe this approach will stultify innovation and economic growth, much as it has in Europe. One thing is certain, money and resources will leave the US for more fertile grounds, countries that will no doubt welcome a new class of economic refugees who are a net positive to their balance sheets.
1
Why can't the wealthy look at this as an investment? An investment in a happier, more secure country. Less crime...no anxiety over going bankrupt due to a medical crisis. No need to worry about losing your job. A more educated population, which means better jobs and higher incomes for the middle class. An investment that is well worth it. Don't worry, we will give them credit.
1
States and municipalities have had quasi wealth taxes for generations. Property tax on real estate and personal property, vehicle registration fees, and all kinds of excise taxes are wealth taxes. As are capital gains taxes when wealth is realized.
These taxes do not cause the wealthy to abandon the trappings of their wealth, and to live like Hetty Green. To assert that a modest wealth tax would cause the wealthy to drop out of capitalism is ridiculous.
Citizens United magnified the First Amendment rights of the wealthy by removing limits on political spending by the wealthy. Perhaps the wealthy should pay a little toward the amplified constitutional rights they enjoy.
We normal people pay wealth taxes all the time. Property tax on home and autos is a direct wealth tax. Income tax, sales tax, SS, medicare are all taking from our "wealth". The problem is the wealthy avoid taxes via loopholes and exclusions. The trump tax cit increased the incomes of these people by amounts equivalent to years salary for many Americans. Isn't welfare great for the rich.?
The framing should be, “The Democratic plans seek to REBALANCE the distribution of wealth by RETURNING wealth to and INVESTING in Americans with lower and middle incomes.”
This is not about taking away wealth from the Wealthy. It’s about re-balancing wealth to allow for continued prosperity For All.
This article makes me laugh at the one eternal truth about economics (an otherwise truly dismal "science":
The already rich will always and forever extract as much wealth as they can from the rest of society until the day comes when the rest of society can't take it anymore--a moment historians call a "revolution." Then the cycle starts over again.
When they're on the rise, and once in power, they'll use whatever means are at their disposal to hoard all the wealth of a people. Nowadays, one of their favorite tools is the university professor "mansplaining" to the rest of us why we should remain grateful for any crumbs the rich grudgingly toss our way.
Me, I've had it.
We don't need economic growth. We need economic stability and the means to care for the people of the US. No one needs billions of dollars. Let them contribute to the common weal.
Warren and others are absolutely correct to argue for increasing taxes on the ultra wealthy and corporations.
Reality tells us, when wealth in concentrated in few hands, and money buys power, governments become tools for protecting the wealthy.
In many cases, governments also become vehicles by which those in political power amass wealth. Putin and Trump come to mind.
In all such cases, the people pay the price in decaying and disrupted societies.
The wealthiest and corporations have escaped paying their fair share of taxes far too long. Every Republican administration starting with Reagan has skewed public policy to serve the ultra rich and corporations domiciled in the United States.
As a result, we now have obscene deficits burdening our future and insufficient tax revenue for effective government. These trends must be reversed.
So why are so many other countries, like many in Europe, with higher taxes on extreme wealth, and robust social programs, doing so well? Is there some special circumstance that prevents the US from operating under the same economic laws that apply to the rest of the world?
2
Don't forget the Federal estate tax. The estate tax was cut in half in 2017, and exemptions doubled in 2018, thanks to Republican lawmakers. The estate tax needs to be raised back to levels found in earlier times to be sure that dynasties do not perpetuate themselves indefinitely (e.g., Murdocks, Trumps, etc.). Only about 2,000 households per year are subject to the estate tax in the US today (Wikipedia), because the exemptions have been raised to very high levels.
1
@CC The joint (spousal) estate tax exemption is about $23 million, chump change for the truly wealthy.
1
Sap economic growth? If by economic growth you mean an increasing concentration of money that benefits those at the top, yes, the plans aim to stem that tide. But if you define economic growth as increasing stability for working folks who struggle to make ends meet, the plans will create the kind of growth this country needs—and I'm all for that!
1
Would be interesting to know what progressive economists actually think rather than only this apparently one sided viewpoint of right wing economists.
Balance in Economic theory is appropriate since it's not a science with as much agreement in cause and effect as say, Climatology, or Chemistry. It's still called economic therory after all.
Yet, there is no such full, multi-sided discussion presented here. Why not interview Paul Krugman, who regularly contributes to this paper? I am pretty sure he would have an opinion that would have added value to this article. Thomas Piketty would likely have some additional thoughts.
Why not consider and report such ideas as those two economists might present? Perhaps I am too hopeful that the press will steer toward balance and this is an unrealistic point of view. Nevertheless I will persist in asking.
1
Okay, bring on the data points for both arguments. I want to see the charts, graphs and let the education of the American people begin. Who in their right mind would listen to Steve Manuchin about any thing! He is the WORST person to bring up the discussions of economic fairness in this country!
1
Not reshape - destroy the fabric of the country.
The more the ultra-rich and their enablers scream and squirm, the harder I canvass and the more I donate to Bernie Sanders. Their time acting as parasites on the American economy and all the people in it is over. Power to the unions, the teachers, the service workers, the public defenders, to everyone who has felt powerless. Power to the people.
1
Uninhibited economic and population growth are the most popular yet detrimental ideals facing humans on planet earth. How bout people and planet first instead of greed and profits for once?
I'm pretty sure Trump in an orange jumpsuit could beat Warren in 2020.
1
Bernie Sanders will push it. Unfortunately the Democrats are intellectually and morally bankrupt. The party is run by rent seeking lawyers. Let us hope this legislation gets done....but I am not holding my breath.
2
“There is nobody in this country who got rich on their own. Nobody. You built a factory out there - good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory... Now look. You built a factory and it turned into something terrific or a great idea - God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
Elizabeth Warren for President 2020
2
Economists and business leaders are working for and beholden to the corrupt crony capitalist corporate plutocrat oligarch welfare kings and queen American caste.
The American federal income tax code provides deductions, credits, subsidies and lower tax rates.
But only for certain industries and individuals, transactions, sources of income. business entity structures, contracts and securities favored by lobbyists buying legislative, executive and judicial complicity and conspiracy.
On the evening of April 4, 1968 Dr. Martin Luther King Jr. was looking forward
to his Poor People's Campaign in the District of Columbia.
King hoped to unite the black and white working class along common socioeconomic educational and political lines. Instead of dividing them across color aka race aka ethnicity aka national origin caste barriers.
2
I see the NYT knows about distraction. Warren is clearly the strongest candidate; in fact, I consider it a privilege to have her as a candidate and to vote for her. The editors would like to slide in another corporatist Democrat — Biden this time, rather than Clinton. They don’t want us to settle on the strongest. In the short term, they aim to distract us. Look here (Sanders); look there (Buttigieg).
“Raising concerns”, eh? Evidently these concerns don’t extend below those in the 1/10 percent.
3
If Larry Summers is against it, then it must be a good idea. Few people have been more wrong more consistently over the last 20 years than Mr. Summers. Given his appalling track record - highlights include preventing regulation of derivatives that sank the economy in 2008 and undermining efforts to break up Citibank in 2009 - I an puzzled why the Times would seek his opinion on anything having to do with economics.
Jamie Dimon is afraid it will just go to "special interests". HA! He is the biggest "special interest" of them all. Bankers thrive off of government support (lest they forget we bailed their sorry, ungrateful guilty behinds out from the Great Recession). These people are so greedy, it is mindboggling.
3
Always approach columns with an eye on which class represented is responsible for the preponderance of the advertising in the publication. Money, it is always about money.
Socialism: starts with utopian vision of egalitarian future, ends with people eating their pets.
1
@Richard
"Communism is man oppressing man; capitalism is the other way around." Gailbraith
1
The Hyatt
multi-millionaire and billionaire class have been hypnotizing the rest of the American public for many many years
1
"The wealth taxes under discussion would deal a major blow to the balance sheets of American plutocrats like Jeff Bezos, Bill Gates and Warren Buffett. If the tax that Ms. Warren has called for had been in place since 1982, the net worth of the 15 richest Americans in 2018 would have been half as much".
Really? And I'm supposed to finish this article? Oh no, men worth 8 billion will be worth 4 billion? Does that constitute a major blow?
Economists need to look at the history of the U.S., and look at America when the wealthy were taxed, when corporations paid over half of America's federal tax bill. That was investment in America.
We are flailing because we lack a 21st Century infrastructure, which weapons do not provide. We need to invest in America and Americans, and the old tax laws made companies in invest in plant and equipment here, and their workers, educations, pay and benefits, which could be written off.
The economy is not Wall Street, it is Main Street, which explains why most people don't see it benefiting them or their future.
2
NYT, pieces like these are enormously irresponsible. You, as a major American newspaper, control the narrative about the economy -- even though all of the assumptions on which this piece is based, are WRONG. To put this piece on your front page is a sickening attempt to shut down conversations about income inequality.
It is NOT true that taxing the wealthy shuts down innovation.
It is NOT true that providing healthcare or other social programs make poor people less likely to work.
You've got this all wrong, wrong, wrong -- and the consequences of you being wrong are huge. Because you control the narrative, the rest of us who know better can't possibly counter your loud-mouthed lies.
STOP IT.
5
GW Bush's 2nd Great Depression redistributed wealth away from the middle class, the majority of whom lost everything, into the hands of the uber-wealthy, who were able to hoover up, at pennies on the dollar, homes and assets lost to bankruptcy and then rent those dwellings at exorbitant prices back to the same people who used to own them. This was great for the already rich to expand their luxury portfolios but devastating for the working class, a majority of whom are working harder than ever for less money, with no hope of owning a home again due to stunningly inflated housing prices and dismal wages, with no job security.
If a wealth tax were to reshape our economy into something a little more evenly distributed between the rich, middle and poor, I'm all for it. Endless growth at any cost to workers has downgraded and ruined many more common American lives than it has helped.
1
@Sydney The "majority" of the middle class lost "everything"? Any data to back that up?
1
Conservatives love to conflate capital with personal wealth. The money a business uses to reinvest in itself and new business ventures is capital. Capital ultimately leads to economic growth and jobs. I'm okay with reducing corporate tax rates on capital.
Jamie Dimon's mansions, paintings, yachts and trust funds are his personal wealth and lead to very little economic growth and few jobs or opportunity for anyone else. Tax it away from him for the good of the economy.
Let's be sure to call out the distinction.
2
This whole “tax the rich” spiel is way too vague. Do you count corporations as individuals? If so there’s a whole different question around what happens to their employees, because the first thing that will happen is a cutting of costs and mass unemployment.
What will they do with the money? “Fund programs” is great, but ask the average American if they want to be independent and have a job or beholden to the Nanny State Government provisions and they will vote the former every time.
The policy discussion all seems very focused on taking away from the rich but is not so specific on what role the big machine of government will take in redistribution. I really don’t see this as a winner across the broader spectrum of the American Electorate.
1
Sanders and Warren offer wealth tax as a solution to the wealth inequality. How does it translate to the common folks bottom-line? How would it improve the life of regular Americans? The tax revenue goes to the government then what?
Andrew Yang offers the Freedom Dividend, $1000/m to every American citizen. No question asked. Imagine how many families will benefit significantly.
Andrew Yang is the real game changer. The change you can believe in.
What have the establishment / career politicians done for you in the last 30 years?
1
@Sometimes it rains Simple - Universal Healthcare & Education & Apprenticeships beyond high school.
Educate everyone, and they can come up with their own $1000.
The rest of us are expected to work longer, harder, and faster for less compensation. Why should a small subset of people be treated differently. If they think that an 80 million dollar tax bill will stop people from trying to make money, they do not understand us huddled masses. Maybe, just maybe, if the rest of us had more money, we could invest in new businesses, too.
2
Economic growth is stimulated by entrepreneurs who invent new products or new ways of distributing and selling them, not by the ultra-wealthy. Their interest is in, first, preserving their wealth, and second, in increasing it and the safest way of achieving both goals lies in increasing dividends and stock-buy backs, neither of which produce new products nor new technology.
The richest 10% now control 76% of the country's total wealth. No one needs 100 billion dollars, and I find it hard to believe any one person needs even 1 billion.
If the top 10% controlled 25%, instead of 76%, they would not suffer, but our country would benefit tremendously.
2
So a Warren wealth tax would reduce Bill Gates and Jeff Bezos fortune by $50 billion apiece.
But I they would still be financially secure.
A wealth tax of 2% is about in line with inflation. I am sure these guys have investment advisers who can beat inflation.
But hey - lets start at 1%. and see what happens.
2
I think it's possible to become wealthy through honest hard work and ingenuity. I think it's next to impossible to make $50 million or more honestly. I'd rather the super-rich weren't able to steal so much money from society in the first place. But at least let's not call it a wealth tax. It's essentially a tax on stolen money.
8
How do we incentivize the wealthy to invest their trillions in systems that are truly sustainable instead of increasing our dependencies on fossil? If growth is the cure all for all that ails capitalist democracies, that growth needs some vision other than growing millionaires intent on ostentatious and conspicuous consumption.
3
The economy needs some sort of shift. Well paying 9 - 5 jobs have been replaced by gig work. A shift in benefits should follow. Executives who grew rich from moving jobs overseas should view the higher tax as a natural consequence of their actions.
6
The effect of a wealth tax would be to shift money from investment to government. The wealthy will have to sell their stocks and other investments to pay the tax. That will create downward pressure on stock prices, which will hurt ordinary Americans with pension plans and investments and be an disincentive to future investments. You do not grow an economy by reducing investment.
It’s worth noting that most European countries that tried wealth taxes have now dropped them.
Entrepreneurs become billionaires when they create companies that are very valuable. For every billionaire created, there are many millionaires and thousands of well-compensated employees. When Mr. Sanders says there should be no billionaires, it’s unclear to me if he means that there should be no successful, valuable companies, or that the government should seize anything of value from the creators. My guess is that it’s a combination of both.
Cuba could be regarded as an equality success story: no billionaires, no millionaires, no successful enterprises, virtually no economic activity, and poverty fairly well distributed. Be careful what you wish for!
7
"sapping economic growth" is good for the planet, good for the future, and a long overdue reset in our expectations of "prosperity forever."
i understand that economists have puzzled over what larry summers called "secular stagnation" (reprising the term from alvin hansen) and murray calls the "productivity paradox." the answer, it seems to me, is found in joe tainter's concept of the "collapse of complex societies."
his point is just you can make a society so complicated that it doesn't work very well anymore. it can even get too complicated for computers, too complicated for AI computers, because it is basically trying to manage human nature and human behavior within a dynamic and evolving technological environment.
nothing more complicated than that.
so why not tax the rich? they took more than their share, let's go all clawback on them and get our share too.
and if you think a failure of "economic growth" (increased population) is a bad thing, a flaw, an objection ... well, your head is still stuck in the 18th century optimism that it could all go on forever and forever.
malthus, of course, knew better. and so does joe tainter.
6
Paul Krugman has a better piece on this issue and he includes Dean Baker, who is a liberal skeptic of the wealth tax. Baker suggests more structural changes to reduce inequality, particularly with respect to labor, which make more sense in the long run.
The constitutional aspects need to be factored in more prominently than they are. The courts are skewed right and there is a possibility that this may not pass "constitutional muster".
Another issue is enforcement. That issue flummoxed the efforts of the European Union to collect a wealth tax.
The largest concern is the amount of revenue raised. The most generous estimate mentioned is 5T/10 years. There is still a lot of taxation left to do in order to meet the targets for these large scale plans that Warren and Sanders have in mind.
5
There is no disincentive to invest with a wealth tax.
If you own assets, you will always put them in either an interest bearing account or something else that provides income and/or capital gains. The wealth tax has no impact on that behavior.
The problem we face is that there is so much capital now compared to 100 years ago with no home for productive investment, i.e. investment that grows the economy such as investment in US factories and production facilities. The bulk of investment goes to either real estate, stocks, or bonds; none of these items constitutes productive investment (i.e. investing in these items does not grow the GDP).
If investment was going to productive economic investment, then maybe we should be concerned about a wealth tax. But it is not. It is going in the above mentioned items.
We are driving up the prices of stocks, bonds, and real estate, which is not good for the economy. This is especially true of real estate. The wealthy are buying homes in poor neighborhoods in bulk and renting them out - we need to stop this.
A wealth tax will GROW the economy because this will stem the rise of asset prices and put more purchasing power in the hands of less affluent people.
I am all in for a wealth tax.
12
The incentive is for capital to flee. Mexico, China, most of Europe and Canada will do very well with a wealth tax in the USA.
1
@Tammy
I would be thrilled if the Waltons & Kochs left the country.
1
I have been a mother and also a caregiver. Money was not in the picture. Love is the greatest motivation.
1
"Democrats’ Plans to Tax Wealth Would Reshape U.S. Economy"
I believe that's exactly the idea. The American economy does not need billionaires in order to succeed. It needs a middle class that can afford to live on its income.
13
Lots of people start businesses knowing they are not going to be billionaires.
It would be interesting, at least to me, to hear from someone like Gates as to whether he would have forgone starting up Microsoft if he had known he would still be the richest person, but with a few billion less than what he has now.
Also, does the U.S. economy need to grow as fast as it has? The U.S., and other developed economies, may soon reach a point of zero population growth.
8
It is long past time to realize that capitalism as we are now experiencing it is utterly undemocratic and has allowed corporations and the wealthy to own our government.
Taxing the wealthy in an appropriate, meaning just, way while also preventing loopholes to avoid such taxation is necessary for correction of the financial imbalance which only skews the economy and creates devastating social conditions.
The state of the economy is no doubt seen quite differently by the wealthy and those who struggle to survive. History tells us how this very situation has ended in the past.
14
I'm skeptical of these "warnings" that small-magnitude taxing of extreme wealth will cause economic slumps, will de-motivate innovators, etc.
Brazilian businessman Ricardo Semler many years ago claimed in one of his books that he'd undertaken a serious effort to determine the income level at which additional income had no substantial lifestyle impact. I believe that was around 20 years ago, and I believe he concluded $3 million was the cut-point. At the time, I felt that seemed about right.
Semler concluded that the drive for higher income was in fact a drive for more status or power. It was NOT a matter of living better.
Today, I'm skeptical that additional income over $50 million mark has an important impact on lifestyle.
And of course, we are aware of the disproportionate political influence wielded by the wealthy - a practical problem big enough to threaten principles of citizen equality. If the very wealthy feel a partial decline of their political influence, I anticipate they'll retain plenty of influence nonetheless. It will just be a less extreme disproportionate influence. I'm not very worried about this being an unfair impact on the wealthy.
Regarding inventiveness and creativity: Do we really believe that a person like Thomas Edison was only in it for the money? I don't, and I'm not worried that a creative person is ONLY driven to creativity by the opportunity to make $50,000,001 rather than $50,000,000.98, etc.
17
"Progressive Democrats are advocating the most drastic shift in tax policy in over a century as they look to redistribute wealth and chip away at the economic power of the superrich with new taxes that could fundamentally reshape the United States economy."
You say this like it is something new that has never existed before. The whole purpose of De-regulation was to destroy the old system that ensured large fortunes were used to better the nation and its people by taxing anything that was not put to work creating jobs, doing research or otherwise building the USA. We also had banking restrictions that prevented the fast movement of money.
Common sense tells you that large fortunes that can be moved easily and used without restriction are going to undermine any democracy.
The fact is the system the republicans destroyed is what we need to have again. I personally believe that the republicans who did this did so with criminal intent to do as they have done since.
13
A wealth tax is a good idea, if Constitutional, but the money should be used to lower other taxes on the middle class and pay down the debt. We don't need a bunch of new spending. Also, we should go after trusts and foundations. If Henry Ford were alive today, he would be shocked at what the Ford Foundation is doing. He would completely oppose their work. We should take the money from charitable trusts and pay off the Federal Debt. Private trusts which were set up to avoid inheritance taxes should be allowed to distribute their money to family members, after paying inheritance tax, or simply be confiscated also. What we don't need is more spending. Pay down the debt and reduce taxes on the middle class.
3
Just listen to the framing of this. Why is it that a policy that potentially impacts 70,000 families (a medium sized city of people) is “reshaping the economy?”
Tax cuts for the wealthy— reshape the economy. Rising housing, health care, child care costs and stagnant wages— all reshape the economy. Student debt is reshaping the economy. Labor arbitrage- the exporting of jobs- has reshaped the economy.
As for creating a disincentive- how many of the great innovations of our time have been made by people in this class of 70,000 families? What proportion? Is it not possible that the social programs that would be funded by these new revenues would unleash the same if not more innovation?
20
Why should fairer taxes sap the economy? Unless we are ready to give up on this democracy with the aim to cut down the current odious inequality, and go on surviving somehow in a klepto-plutocracy.
10
Its not that it could sap the economy its simply the fact that everywhere its been tried it does, unless your an oil kingdom like Norway or a tax haven like Switzerland.
Yes, well that is what it means to be an opponent: fear of change. What if things get significantly worse? I would argue that although that should be taken into consideration, what matters is recognizeing the pitfalls and placing controls to limit how bad that potential problem could be. In the end, it always took courage to venture into the unknown to find success. Fear of change alone is not enough to do nothing. That's what it means to be a coward. To be frozen by fear and never taking a chance.
2
The sky is falling! The sky is falling! All of the chicken littles are scared of a wealth tax because of what they fear it will to do the economy. But as legitimate economists from Daniel Bernoulli in 1738 (look up "St. Petersburg Paradox") to Paul Krugman in this newspaper have shown, the marginal wealth on the extremely high end has little effect on individual decisionmaking. The public benefit of such a tax far outweighs any rational disincentives for the superwealthy.
4
It has been increasingly difficult to tax the rich (remember that's where the money is.) Under Ike the top marginal rate was over 90% and the economy did very well.
Republicans never liked the New Deal and for decades have claimed that reducing taxes would lead to prosperity. What it has actually done is increased income inequality to extremes, starved government services including infrastructure and social programs, increased taxpayer debt, polarized our politics, and made economic volatility much more likely.
It takes good government to maintain a balance between democracy and capitalism. The more inequality, the worse the government. Unfortunately, capitalism is winning now, so it is plundering and destroying the earth for profit.
We should be seeking a balance with nature. For example: our oxygen is generated in forests we are fast cutting down, and it also comes from small creatures in the ocean threatened by acidification. According to the WWF, by 2025, two-thirds of the world’s population may face water shortages. And ecosystems around the world will suffer even more.
Only in economics is endless expansion seen as a virtue. In biology it is called cancer.
Climate devastation will be the mother of all market failures. We probably are destroying the planet for the kids. From what we know of space, humanity will not get a second chance.
Republicans oppose moves toward sustainability. Democrats plans are a good start.
http://gopiswrong.net/
4
The fear that the uber rich will start divorcing each other to avoid taxes will really keep me up at night. Scary.
5
First simplify the tax code.
Remove the loopholes that allow the top 5% to deduct yachts, ranches, multiple homes.
Do not allow Amazon and other corporations to pay $0 taxes
Increase the top rates.
Tax the money managers at EARNED rates not capitol gains rates
Then add a wealth tax.
All of these would go to fund healthcare for all, reduced tuition for all and many other programs.
I do NOT believe slamming billionaires is the answer, but removing the legal write offs in the complex tax code sure helps.
7
For those moaning about proposed ‘wealth taxes’, please google Florida’s intangible tax. While the tax has been not levied since 2007, it is not a new, horrible Democratic idea.
1
How about starting with the carried interest loophole that allows hedge funders pay almost nothing on their investment income? Trump railed against it during the campaign but his tax cut bill did not eliminate it. Also, reinstate the SALT deductions. There are many middle class people who live in blue states whose taxes increased as a result of the cap.
3
The mortgage interest deduction helped the rich not the poor. Trump should be applauded for introducing some limitation. we need to go much farther.
1
@dba
Also, reinstate the SALT deductions.
SALT deductions never went away. They were merely capped.
1
If it saps growth..then good! This recovery has proven once and for all that the ultra wealthy fixed their plumbing in case something might trickle down.
3
She has my vote!
1
Economic growth for the sake of growth is the mentality of a Cancer cell.
5
And the missing subhead should have read: ‘And That is A Great Thing’
5
The complaints of these captains of industry are complaints that their greed might be regulated.
We regulate greed. We have to. Because we're animals, apes. And we're greedy.
We regulate ignorance. We mandate school, however terrible it is (and could be made much better with restructuring and, yep, more money. Greed again!), as capitalists need those who can read and do basic math.
We can't regulate stupidity. Education helps to develop native intelligence, but that's as far as it can go.
The rest is thoughtful regulation.
If the captains of industry want to continue on their path of unbridled greed, they should prepare for a violent future.
4
I've been a Democrat all my life. I was even a member of our district's Democratic Committee for a while. Most of the principles of the Democratic Party are inline with my personal beliefs. I am a 73 year old retired widow living on my Social Security and working a 20 hour a week part time job to help cover my expenses. Yes, a lot could be better and should be better but I swear if the Democrats do something so phenomenally stupid as to try to tax an individual's PRIVATE wealth I'll vote Republican. God help me I'd even vote for Trump!
7
Hmmm. Would you feel differently if that “private wealth” was obtained by cheating on taxes or by using a million dollars in lobbying to get a tax rate on investment money that is less than what you pay now?
1
Let's just make sure we understand the numbers here. If Jeff Bezos were to lose 80% of his current fortune, he'd still have 22 BILLION dollars. He could lose more than 99% of his fortune and still be a billionaire.
And yet: "[Mankiw] also noted that billionaires ... have proven to be experts at gaming the system to avoid even the most onerous taxes."
This is the real problem here. On one side, a handful of people have more money than could be spent by several generations of prodigal descendants. On the other, 40% of Americans are struggling to meet basic needs. Clearly, the only way to fix the problem is to force billionaires to surrender money they, their children, and their grandchildren simply do not need.
Tax them. No loopholes. Use the funds to support Medicare for All, education, and a host of other important programs.
6
@Valerie
My favorite Bezos wealth breakdown, because who can really grasp the enormity of $170billion, is to consider that
this single person could spend $200k EVERYDAY since the time Jesus walked the earth, and he'd still have 22 billion dollars. that's 22,000,000,000 left over even after spending 200,000 everyday for thousands of years.
That's disgusting.
1
Yeah, and Zoning Laws will cause new property development to plummet. Silly scare tactics.
5
Gee, isn't that too bad. Economists and business leaders are worried about Warren and Sanders proposals? How about they worry about what's currently happening. Here's another headline from today's NYT: "Global Trade Is Deteriorating Fast, Sapping the World’s Economy"
5
Ross Perot had a simple, effective tax plan. 15% taxes on income above $30,000 on gross salary or profits, period. It might put some corporate tax lawyers out of business but that would be a small price to pay.
1
These arguments against the wealth tax are basically akin to "but we get such a good aerobic and strength workout as we whip the poor and middle class into submission." Give me a break.
6
Oh, the old "economic growth" myth. Keep that one going to keep the status quo working so well for the 1%, but not so well for the rest of us.
What is wrong with this picture?
"Economic growth" is often measured by the GDP (Gross Domestic Product) defined as the "total value of all goods and services provided in a country in a year," The U.S. is #1 in the world. Aren't we great!!!
Ah, but how is all that wealth distributed among the populace?
"Economic inequality" is sometimes measured by the Gini coefficient and indicates the concentration of wealth among the population. Countries with greatest equality are Ukraine, Iceland; Noway and other Scandinavian countries rank high.
The U.S. is tilted toward the inequality end more in keeping with have vs. have not nations, and between Uganda and Hati.
Or maybe there is too much emphasis on money and wealth in determining the well being of people in a country.
How about Quality of Life ranking (based on a number of indicators)
Ranked at the top: Denmark, Switzerland, Finland, Australia, Iceland ... U.S. (#13)..
https://www.numbeo.com/quality-of-life/rankings_by_country.jsphe
Happiness Index: Top countries: Finland, Denmark, Norway, Iceland, Netherlands...U.S. (#19)https://www.atlasandboots.com/happiest-countries-in-the-world-ranked/
Look at all those democratic-socialist countries ranked at the top on distribution of wealth, quality of life, and happiness. We don't want that do we? (Vote GOP);
Or do we?? (Vote Dem)
6
I started a small business with nothing.It grew into a multimillion dollar business.Because I had a family,health insurance was my biggest worry.For small entrepreneures insurance can be quite expensive.Mine at the time was $1000/month(20 years ago).It rose to $3000/month for me and my wife 10 years later. I was paying more in health insurance than some of my employees made in a year.Part of this is because I live in a rural area but this is still not right.I realized long ago that without good (and healthy) employees, the business would not have succeeded.Before he worked for Obama,Summers was helping the big investment banks develop the derivatives that turned out to be financial bombs leading to 2008.Mankiw,from his ivory tower,always discounts the value of employees when he talks about new businesses.Steve Jobs and Larry Ellison started with nothing.Do you think they would have decided not to go into business because anything they made over 50 million would be taxed at 2%?Any would- be entrepreneur who lets this stop them would wouldn't make it anyway.
11
.02 x $50 mill equals $1 mil. Leaving a paltry $49 mil...!
Geez, no wonder why the rich are so mad.
10
The wealth tax on the super wealthy, although I am not what one would call a financially liberal individual, seems reasonable. The problem is I don’t trust either of these two, were they to be elected, or the Congress that they would be elected with, to limit this tax in the longer-term only to the extremely wealthy… There’s no doubt in my mind that it would quickly be expanded to those with far less money, family businesses and assets built through hard work, frugality, investment and surely some luck over generations. There is a very big difference between taxing the Uber wealthy, and punishing those who have worked hard and saved over the course of their and their families lives but must still budget for daily life just like everyone else. I can support the former, but not the latter, and neither Bernie nor Elizabeth or their supporters see the difference.
I don’t think I’m the only one who sees these two coming for the pocketbooks of the middle class all too soon, and of course Bernie has absolutely no credibility in my eyes once I found out that his charitable donations are embarrassingly paltry, he pays his own workers far less than he claims everybody should be paid etc. etc. He’s a perfect example of a liberal who knows what’s best for everyone else, but has not integrity to live up to those high ideals himself.
6
This is the age-old, long-since-debunked economic theory that unless we have a class of super-rich elites in this country, the economy will screech to a halt. Total and complete baloney, unless of course, you are one of the mega rich.
But the truth is, a permanent landed aristocracy is not required for the proper functioning of the economy. The super rich do not create jobs as is commonly believed.
The United States economy is powered mainly by consumer spending. And the less money that real people have to spend, the less well the economy thrives. The US economy is not driven by yachts and Monet paintings.
But the super riche will continue to put forward this nonsense because it is in their vested interests to keep America stupid. And poor.
11
Bezos would be worth only half as much as he is now!
Oh the inhumanity!
7
Judy Garland was destroyed by the IRS amongst other more personal problems.
If you are ready to go back to the days where the IRS got 70 per cent or more of your income then by all means vote for Bernie Sanders.
4
Rich people pay fare share of taxes. In NY rich people living in the city pay federal, state and city tax but they don't use public school, public transport and many other public benefits. These benefits are used by other people living in vicinity. So in other terms rich people are paying school fee of many other kids.
Now the question is whether rich people should pay for other people's expenditure's for health and higher education or not. Answer is yes they can take out money they spend on the philanthropy and other research related activities and pay for other things. It should be fine until unless the middle class (the one who already don't get the full value of his/ her money in NYC) don't have to pay for anything extra.
1
Folks, economic growth as a positive metric is obsolete and meaningless!
Quality of life is what matters. The USA is way, way down on that list. We must start major advancements in this country if we are to save our society and the planet. It will be disruptive to the status quo. That is good.
https://www.socialprogress.org
8
“Business leaders” oppose being taxed. Big news! In other news, water is wet.
6
Mnuchin, a Bush appointee and Lawrence Summers (not a left-leaning economist by any measure) and the Chairman of JP Morgan are the authorities quoted in this article. Why does the NYT elevate the predictable responses of these establishment voices with a breathless headline about raging debates and fierce opposition to progressive tax policy?
4
The vast accumulation of wealth by the 0.1 per cent has created the equivalent of nobility in the United States. A class protected by their own political self influence and abetted by the capacity to transfer this wealth to generations of their unborn progeny. Precisely how this contributes to our national economic benefit defies explanation.
The same can be said of extravagant CEO compensation, which frequently rewards incompetent managers with golden parachutes simply to get rid of them in avoidance of litigation. That aside, executive compensation itself should not be confused with capital investment which is the fuel for economic expansion along with monetary policy and consumption.
After WWII we underwent massive economic expansion with tax rates of 80% on the wealthiest of us and created our middle class. We have now seen that class crushed by tax policies, the emasculation of unions and an entrenched political apparatus hell bent on protecting its political benefactors.
Americans should wake up to the realization that Russia is not the only oligarchy in the world today.
5
Ha! Democrats “politicians” they surely know how to tax and destroy wealth but don’t have a clue how is created
4
It's created by working for a living, Al. Not by raiding the cookie jar every chance you get.
I started a small business with nothing.It grew into a multimillion dollar business.Because I had a family,health insurance was my biggest worry.For small entrepreneures insurance can be quite expensive.Mine at the time was $1000/month(20 years ago).It rose to $3000/month for me and my wife 10 years later. I was paying more in health insurance than some of my employees made in a year.Part of this is because I live in a rural area but this is still not right.I realized long ago that without good (and healthy) employees, the business would not have succeeded.Before he worked for Obama,Summers was helping the big investment banks develop the derivatives that turned out to be financial bombs leading to 2008.Mankiw,from his ivory tower,always discounts the value of employees when he talks about new businesses.Steve Jobs and Larry Ellison started with nothing.Do you think they would have decided not to go into business because anything they made over 50 million would be taxed at 2%?Any would- be entrepreneur who lets this stop them would wouldn't make it anyway.
2
The wealthy are not good investors. To maximize the investment for our country wealth needs to be in the hands of the consumer so new entrepreneurs can develop new wealth creation businesses.
Adam Smith capitalism needs to replace feudalism to maximize wealth creation.
1
I always enjoy it when Jamie Dimon is brought in for "expert" opinion. Get ready for Jamie World --- the mindset of the US's leading financiers. His commentary is that rich people will happily pay the wealth tax if they believe the additional revenue will not be wasteful and go to special interests "and stuff like that." Presumably, the other stuff references the extraordinary government support of the financial sector, including the many tens (if not hundreds) of billions of dollars in the "too-big-to fail" funding benefit (banks pay lower interest rates than non-banks) that financial institutions like Mr. Dimon's count on for their continuing profitability.
3
@Sam
"Presumably, the other stuff references the extraordinary government support of the financial sector, including the many tens (if not hundreds) of billions of dollars in the "too-big-to fail" funding benefit......"
I would think that all the money they have earned since then could be used to save themselves the next time they gamble their money away. OH... They have gutted the rules that would make them do that. With the tax breaks they have gotten, "We the People", will not have the money to bail them out again, nor should we go further into debt to do so.... That should dig a nice and much bigger hole in our economy.
1
This article had the unintended consequence of convincing me of the MERITS of the Warren/Sanders proposals.
2
Moderate (fiscally) to liberal (socially) Democrat here: The "wealth tax" plan has very poor optics (anything which can be viewed as a "taking" by the government of something already earned does), plus in many cases it may amount to double taxation (income tax already paid, and/or property taxes already paid and continuing to be paid). It's not an idea I support, and I don't think a majority of the American people will, either. A return to truly progressive taxation (higher top rates) coupled with corporate, estate, and capital gains tax reform, plus more intelligent/efficient use of existing tax revenues, should be sufficient, and far easier to sell.
I'm all for the social programs (especially universal health care and universal education) being proposed, and I'm more than happy to have my tax dollars help fund those efforts, but the wealth tax is an unfair method of paying for them, and casting the rich and corporations as being somehow fundamentally evil is getting rather old.
Close the existing loopholes, enforce a minimum tax, raise taxes on passive income, increase the top earned income brackets, and use existing and new revenues more intelligently. It's worked before, and it will work again, and without the stench of retroactive taxation, which is essentially what a wealth tax amounts to.
1
@Will Crowder The rich and corporations being cast as evil bores you? It is getting old? Well, what IS getting old is the rich and the corporations buying themselves preferential treatment, constantly tilting the playing field in their favor. I am so sorry if the quest to level the playing field offends you. Maybe to appease you, folks without health insurance should try to die off the beaten path, in order to not get in your way.
When conservative economists talk of a supply side of the economy, the implication is that their is a demand side. We have fed the supply side since the 80’s and the results are in. The top is taking wealth from the bottom.
The investment money is awash on Wall Street. They have nothing better to do than put it into hedge funds devoted to rent seeking. It is not going to productive use. It is only going to consumptive use.
Economies require balance. There is a time to be a supply sider and a time to be a demand sider. Now is time to favor demand and infrastructure.
1
History shows that the end result of extreme wealth inequality is violent revolution. Those economists who decry a wealth tax should spend a little less time reading economic theory, and more time reading history. A wealth tax now would follow the democratic ideal of occasional non-violent revolutions, through elections, that keep the masses fed and happy. The .01 percent won't like the alternative.
3
The whole idea that a wealth tax is overly burdensome on the super-rich is preposterous. The vast majority of Americans already pay a wealth tax of about one percent on the largest asset we own in property taxes. To think that a tax of a few percent on capital assets in the billion dollar range would ruin the economy is pure fantasy.
1
All the economists mentioned in this article have strong political ties and with those ties are equally strong biases. The fact is that economists are not only biased by their political affiliations, but the dismal science isn't capable of giving answers, which allows everyone to speculate about economic effects without any basis in fact. These speculations simply reflect political agendas. The one fact that stands out to me is that in the 60's when I was growing up there was prosperity, a stronger middle class (less income disparity) and high taxes.
5
What I hear in the arguments in the article is that we have a very strong economy that serves the very rich.
And the important thing is to keep that strong economy.
If we decide we want an economy that serves the people, it might be weaker. AND, horror of horrors, it might make it harder for entrepreneurs to become multimillionaires. If they can only reasonably hope to take $15 million our of the IPO instead of $100 million, they will not be motivated and will probably go on food stamps (if we still have them)
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"Critics argue that a wealth tax would cripple economic growth and sap the motivation of entrepreneurs."
Except that we're now experiencing the largest income gap in the U.S. in the last 100 years; so, whatever economic growth we're experiencing is only benefiting a minority of Americans. Plus, the last figures for economic growth aren't even reaching 3%; now that is a real..."nothing burger. "
More Americans than not have never fully recovered from the Great Recession, productivity levels are the lowest since the 1970's, wages are flat, working conditions and benefits have significantly diminished, and all those consumer spending reports we tout every month don't tell us the whole story...like, how much of that spending is on credit?
As for all those entrepreneurial endeavors...you mean the ones that haven't produced a penny of profit? Or the ones like Tesla and Facebook who are so poorly managed?
The Wall Street journal can confirm that historically, our economy generally does better under Democrats; the belief that Republicans are better for the economy...is just that, a belief.
Second only to our illusions about our government...are our illusions about our economy and which political party most benefits the economy.
We employ smoke and mirrors when it comes to our economy...but reality will be catching up soon. Let's hope and pray we have responsible, mature leadership in place when that happens.
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Want to avoid wealth taxes? Then I would say to billionaire CEOs pay your employees better, provide comprehensive healthcare to both full and part-time employees, consider bringing back some kind of pension programs. The results will be the same, you'll be a bit less wealthy, but you'll get there is a way that more directly benefits the people that work everyday to make you so successful. Sounds like a no brainer to me.
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Right at the top the article says: there are economists and business leaders who fear the plans would sap economic growth. Let us be clear, as is pointed out later in the article the growth we have experienced has primarily been for the rich.
In essence what those economists and business leaders are worried about is maybe the very rich won't get as rich as fast. Again the article says had there been such a tax the very rich would only be half as rich. What is wrong with that? They wouldn't even have to stop flying in their private jets.
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The authors note: “skeptics warn of economic stagnation, depressed business confidence and a legal battle that would go to the Supreme Court”
There are always skeptics. And, unlike this case, the skeptics sometimes advance food for thought.
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Elizabeth Warren’s plan to tax the wealth of larger fortunes at a higher rate is exactly what is needed to preserve our economy and democracy.
In the book “Capitalism in the Twenty-First Century” by Thomas Picketty, he determined that the larger the fortune, the faster the percentage rate of growth. An economy cannot survive more and more flowing to fewer and fewer. We all know how the game of Monopoly ends, and the key takeaway is that it ends.
Warren’s plan would compensate for these fortune growth rates increases with size by imposing an ever-larger wealth tax on them, preventing the ultimate chaos and suffering of an end game.
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Greta Thunberg was right to call never-ending economic growth a fantasy. How can our economies "grow" endlessly within a finite earth system? We must radically alter our economy to be people friendly, earth friendly, worker friendly. Increasing economic disparity in the name of "growth", while more and more workers have to do multiple low paying "gig economy" jobs, while a handful of billionaires continue to reap most of the benefits? I say let Warren and Sander have a chance to lead, this economic model is leading to ruinous consequences to the earth and the middle class is crumbling. "But don't threaten growth!" they warn. Growth at what cost?
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The main problem with any wealth tax (regardless of whether you agree or disagree with it in substance) space is that it is very doubtful that I would pass muster under the US Constitution. Unlike the income tax, which is only constitutional as a result of the 16th Amendment), a direct federal wealth tax would have to be apportioned among the states according to each state’s population. This would be unworkable—if not impossible. Two thirds of the House and Senate would have to approve a constitutional amendment—with 3/4 of the states ratifying it—to make such a tax feasible at all.
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@MRC
You are correct that there is no provision in the Constitution for a wealth tax
"Taxing wealth will sap economic growth." Enough already! The same lame arguments have been used against raising the minimum wage. But over and over it's turned out the local economies doing so have blossomed. Turns out people with money in their pocket spend it.
Republican economics is built on a pre-WWII economy, a pre-Consumer economy. Giving the guy on the monopoly board in the tophat and monocle a bag of money to "invest" doesn't work in the 21st century globally connected financial markets.
Putting more monies into consumers' hands to then spend generates economic growth today. Tax excessive wealth, intergenerational wealth and hoarding and redistribute in the form of cash and public investment.
40 years of Republican trickle down has failed - repeatedly.
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The tax cuts were a boon to corporations and the rich, but accomplished little else. The overall economy has not improved because of the tax cuts and seemingly never does any time taxes are cut. Income inequality has risen to record levels. Maybe its time to stop trusting rich people when they claim to be looking out for everyone else.
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The real question is whether the doom and gloom scenarios would really happen. All economists statements are pure speculation and diversion.
The idea that a two-cent tax on income over $50 million would “choke the economy” is another fallacy brought by the likes of Steve Mnuchin and those who don’t believe in paying their fair share to support our country and our citizens. Citizens who, btw, make their wealth possible by working in their companies and buying their products and services. The wealthy aren’t using their additional gains to employ a higher percentage of people or increase pay — instead they continue to overload the people who do work and hold down pay, leaving those with jobs more tired, stressed and dissatisfied that they can’t provide higher quality and do better for customers. The culture of greed needs an intervention.
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A wealth tax like those proposed by Warren, could be accompanied by a 100% investment tax credit for new plants and equipment in the US, and STEM related R&D. This credit would apply to both businesses and private investors. It would put capital to work to benefit everyone. Also, executive compensation should be set back towards salary, like it was 40 years ago, so executives’ interests would line up more with the long term interests of the company than with the shareholders. This would reduce the liquidation and hollowing out of our manufacturing and R&D.
What about tax-exempt bonds? So now, under Liz's plan, the interest would be tax-exempt but not the principal? Good luck with that.
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I am certain business leaders are concerned that their take home pay would go down.
But the system they advocate has not worked, economic inequality has continued to worsen in the US, upward mobility has stagnated, and CEO pay continues to rise.
In addition, not all economists are worried that raising taxes will hurt. Clinton and Obama did it, the economy did just fine.But in a world of alternative facts and false equivalence, these achievements are ignored.
So, let the businessman quake. They will live, even if the system is not gamed for them as much as it has been.
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So glad to see attention paid to the wealth tax as proposed by Warren and more recently by Sanders.
However, the bulk of this piece was given over to the agony of the super rich on giving up 2 cents of each dollar of wealth beyond $50 million.
What is sorely missing is the adverse effects of economic inequality on individuals, society and even on democratic governance. The UN recently cited the US for its extreme economic inequality, on par with that of developing nations. I read a long article on this in the Guardian and, searching carefully for similar articles in the Times and WAPO, only found a few lines to that news some days later. So while it's good to see articles on candidates' proposals to correct our economic problems, the coverage is heavy on how taxes hurt the rich. Is this bias conscious or unconscious?
And Summers is a left leaning economist? Really? He's a Wall Street economist who worked to make sure the bankers were compensated for their losses after they triggered the recession of 2008.
I find the NYT interesting to read, but this article tells me to read with caution; the paper has blind spots.
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News flash to economists: lowering taxes on the rich does not create a "trickle down" of anything but more wealth into the pockets of those who don't need it. You don't solve income inequality by giving the wealthy a free pass. If there is a business venture that is worth a fig, it will find funding and it will succeed, regardless of the tax brackets; if it's yet another useless idea, it will fail. That's how the market actually works. Seems like this notion gets dispelled during every Republican administration - and yet here we are again.
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How about every company going public will set aside 1% of shares for the US treasury as a “maintenance fee”? This would be public partial ownership that the government could hold to finance public priorities. Assuming that domestically traded companies total 30 trillions, it would amount to 300 billions of public ownership, and if kept untapped, would generate around 30 billions of income per year.
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How about some strong economic growth for middle and lower classes?
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Firstly, unending growth is unsustainable, and sometime soon policy makers will have to address this. Second, when the opponents of wealth taxes are pretty much all very wealthy and doing very well under the current system (mnuchin!), then they have zero credibility with me. If they don’t want a wealth tax purely because of economic arguments, then what are their suggestions for reducing inequality?
The assumption here is that the super wealthy have hold their fortunes in cash, gold bars and vaults. Most of the billionaires cited, like Bezos, Gates, Buffet, Zuckerburg, are really "paper billionaires" who hold 90% or more of their wealth as shares in public or private companies. If we tax this paper wealth, what would happen? They'd sell shares, liquidate their investments to pay this wealth tax. So, yeah, there would absolutely be less business investment, make long term patient investing much harder. Would it affect the average family? Imagine a world where your 401k is 1/3 less, Amazon only sells books, Netflix is still just DVD's by mail, Walmart is not nearby, we all still use flip-phones, only college kids use Facebook. Welcome to the world of equal outcomes...
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As if on cue, headlines citing raised concerns from economists and business leaders who fear a superrich wealth tax would sap economic growth. Raiding those billions socked away by Bezos, Gates, Bloomberg et. al. will not be without a downside. No such headlines about the soaring wealth tax paid by folks of more modest means right here in the the five boroughs, and disproportionately in the outer ones. Here as elsewhere it is called the property tax and has gone up 40% in five years in this cash drenched city. No articles about threats to growth or, God forbid, tax justice.
Who cares what 70k millionaire/billionaires want?
They've been stealing from the rest of us for decades. Two percent is nothing. How about we take 90% over $50m in assets?
Let's make health care universally affordable. Let's eradicate poverty. Let's give our young people a shot at whole, productive successful life by extending public education through an undergraduate degree. Let's solve the homelessness and housing crisis. Let's pay everybody a living wage.
Policy that values wealth accumulation is policy that normalizes hoarding and is the very anti-thesis of self-governance.
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@Tee the trouble with your theory is thousands upon thousands of middle class workers will be taxed out of jobs. Americans just aren’t that stupid and either Sanders or Warren will get beaten to the back of Beyond in 2020 with this kind of rhetoric.
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@Tee
Are you being facetious? It's hard to tell.
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@Tee, I agree. My 'wealth' is pretty much tied up in my house. Each year I pay a wealth tax collected by my local government, and used to pay for things the locality's citizens want - things such as schools, police, fire protection, parks, etc. I pay 4.8% of my wealth every year. And I don't whine. So, I agree, 2% is nothing.
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Seems to me having large percentage of populace overburdened with student loan and/or medical debt is way BIGGER sap to economic growth....
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All unearned income, capital gains et al., not reinvested in things with intrinsic value like jobs, manufacturing infrastructure, taxed to the hilt. Income from blood and sweat, daily grind employment minimally or not taxed at all.
I see it this way. Capitalism is a system that distributes the spoils of production/sales to the participants. Government needs to fund itself. So it seeks to siphon of some f that money.
Wherever it is siphoned off from it provides a disincentive. Currently the most disincentive is to labor (because we tax labor). To adjust the source of government income due to changing capitalism is the right thing to do. I do think a combination of VAT and wealth tax is the right solution while completely eliminating labor tax.
Labor tax gives an unfair advantage to machines, especially if machine investment can be written off quickly.
Conceptually I favor something like this but, why doesn't anyone comment that our constitution doesn't allow this? The sixteenth amendment says this pretty clearly: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. We have enough trouble legislating anything these days I am not holding my breath on a constitutional amendment to allow this.
Why do millions of working-class Americans buy into the Republican position that it is wrong to raise taxes on billionaires? The answer lies in something fundamental to the American character. Founding father John Dickinson (1732 - 1808) noted it long ago. “Most men with nothing would rather protect the possibility of becoming rich than face the reality of being poor.” So long as people cling to the belief that their fortune is just a day away, they will continue to vote for the party of the plutocrats.
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With higher taxes on the corps, they would have to go back to paying a decent salary to employees, or else pay the tax man.
Payroll is a write off, but once taxes were lowered, the CEO's kept the money for themselves.
So much for the trickle down ruse.
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Every critic mentioned is a multi-millionaire. As readers of the media, it is very important to look into who is feeding ideas to us- millionaires are telling us not to tax millionaires. Is the entire economy really in their best interest, or do they have themselves in mind?
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There will never be "an enormous transfer of money from the wealthy to ordinary people" in the United States: This is merely the fairy tale that musters the vote that elects the puppet that furthers the (same old) agenda that concentrates wealth to the same 0.1% that causes inequality that leads to class/race/religious division that alienates voters and occupies citizens' debates until the next fairy tale comes along four years later.
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"'I know a lot of wealthy people who would be happy to pay more in taxes; they just think it’ll be wasted and be given to interest groups and stuff like that,' Mr. Dimon said."
Wasted on stuff like public pre-K education and universal healthcare...
So what would Mr. Dimon's wealthy friends like their higher taxes paying for, free prison terms for the unwashed masses?
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Robert Frank is a proponent of of a highly progressive consumption tax and I think that should be looked at.
With advent of new technology & crowd funding, reliance & importance of corporate funding been reduced significantly. Role of socially polarizing issues in politics like religion & race, which political parties (mainly the Republicans) tend to exploit, is also decreasing. No one can stop it either.
Yes, I know the role of the aggressive & highly vocal Christian/Evangelical fanatics & white supremacists that political & corporate America use. But I tend to think that these people now behaving more aggressively mainly because they too realized its declining influence. Now atheists & agnostic Americans are more in numbers and % than even Evangelicals (~25% vs 23%), even though evangelicals basically control American politics since ages while currently there is not a single Congressman/Senator who is openly atheist/agnostic (and that's a concern.)
Corporate America & the ultra rich guys need to understand that proposed tax increase by Warren/Bernie would leave vast majority of their existing wealth intact. But mass frustration & growing civil unrest (if not the threat of civil war as Trump warned, if he is impeached; and that reality is equally great if he's not impeached and win in 2020) would make those king class at a far worse situation. Supporting Warren/Sanders would actually help them to get a more stable country with more lucrative (middle class) consumers.
But, then, one can argue with policies but not with ideology or ego of those who got a sense of entitlement!
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I didn’t realize wealth was the enemy of the people and should be confiscated. What a winning idea never heard of before. But who gets to decide what to do with it?
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It certainly would 'reshape the economy.' Take money from the top .01% and move it downward to the middle - a very good idea!
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The tax system is wildly favoring those who make money by having money: profits from trading stocks or real estate are taxed at a much lower rate than income from work (wages and salaries). This rigged system of taxation has led to the drastic rise wealth inequality we see today. It is has no benefit for most Americans. A highly skewed wealth distribution that is not contained will eventually lead to social unrest or worse.
We all pay quite high property taxes on our homes, but not on other possessions. Why should there not be a modest tax on extremely large wealth? The least we should worry is whether billionaires get rich fast enough. There is no value to society in preserving billion dollar fortunes for generations to come - unless we want a government of the rich for the rich, i.e. the end of a government that works for most people.
Warren has a rational approach that could slightly reduce the magnitude of wealth inequality and that would make new investments that will improve the lives of millions of Americans. Her approach may need some fine tuning, but world-renowned economists have proposed similar approaches. Whether Americans are rational enough to endorse such an idea instead of following a crooked President and his Republican servants is quite a different story.
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Our economy needs reshaping - it's too "top heavy". The massive amount of money that now, and increasingly, winds up in the hands of very few needs redistribution. It will be spent more meaningfully, aid more hard-working people to have a better life and future, and generate larger tax revenue overall to fund much-needed programs and projects (NOT Trump's folly).
The uber-rich have used so many loopholes and tax breaks to play the system that much of their massive income is not taxed. You would clearly see that if the Grifter-in-Chief would release his tax returns as he promised. Our King-of-Fraud is a prime example of a tax cheat and an exemplar of all that is harmful to our economy.
The Markets will be just fine. Banks will lend, industry will grow, life will go on, but without the restrictions that crooks legislate upon us for themselves, and WITH protections that Trump has deleted from our laws. Our children will be safer and healthier, our workers better paid, our environment more sustainable, our rule of law more intact and, hopefully, our governance more just.= and equitable.
Without Trump, Barr, and the Criminal Cabal (i.e. THE SWAMP), we can all get back to a secure life and PROGRESS.
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Free up small businesses to attract talent! Single payer! It levels the playing field. Big business can use other perks to attract talent.
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The taxes proposed would not “shrink” the fortunes of the super wealthy as you write. This is a fundamental misunderstanding of how money works. The momentum super wealth creates, creates more wealth at an astonishing pace. The taxes proposed by these candidates would only slow the growth rate of the people they intend to tax. We do not need to be concerned of their well being.
The additional tax revenue would have a much more productive effect to our economy than more hoarded wealth.
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“I know a lot of wealthy people who would be happy to pay more in taxes; they just think it’ll be wasted and be given to interest groups and stuff like that,” Mr. Dimon said.
This apparently is quite typical thinking among the wealthy. It's conservative code: don't waste my money on "takers" like labor, the disadvantaged, the poor, minorities, etc (aka "interest groups"). That waste includes public money to improve their lives and provide opportunities (aka "stuff"). They view their customers (who make them rich) as marks and saps. They have no idea what makes our economy work--what they learned about business is all they need to know about economics.
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Because massive tax cuts for the wealthy have fueled stagnation for the past 30 years. The only growth these folks are concerned about is the growth of the income share at the top of the distribution.
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The concern about economic growth is all about protecting the fortunes of the very wealthy. There is evidence from our own taxation history (tax rates post WWII) that it is nonsense.
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The current trajectory has been created by the elites for their own benefit of course. Any opposition to their crushing system will always be met with threats of "economic downfall". Come on folks...we are smarter than tbis right? Don't we see the strings yet? Don't we understand their game? We must encourage and support, and educate and enlighten, our fellow citizens until we fully expose the elite's false and harmful narrative.
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I don't want to hear anything about economic growth from W's advisers. 🙄
I don't thing anything would help the economy more than taxing the rich and giving the middle class a break. the money saved from student loan cancellation- free college and universal child care- would go back into the economy, not spent on yachts.
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